Press Release

Cantaloupe, Inc. Reports Fourth Quarter and Fiscal Year 2021 Results

Record Fourth Quarter Revenue Increased 50% Year over Year

Company Provides Fiscal Year 2022 Outlook

MALVERN, Pa.--(BUSINESS WIRE)--Sep. 2, 2021-- Cantaloupe, Inc. (Nasdaq: CTLP) (“Cantaloupe” or the “Company”), a digital payments and software services company that provides end-to-end technology solutions for the unattended retail market, today reported results for the fourth quarter and fiscal year ended June 30, 2021.

“We delivered record revenue in the fourth quarter, capping off a transformational year for the Company. During the last year, the Company demonstrated an ability to serve our customers, develop innovative new products and solutions, and deliver robust financial performance in any macro environment,” said Sean Feeney, chief executive officer, Cantaloupe, Inc. “Our financial performance, strong balance sheet and significantly reduced spend on professional services has empowered us to invest in our people, our technology, and support our customers as they work to meet changing consumer needs. Looking ahead, we are excited by opportunities to continue to innovate unattended retail with best-in-class solutions and service, consistent with our goal to drive future growth and operating leverage.”

Fourth Quarter Financial Highlights:

  • The Company delivered record revenue in the fourth quarter of $49.0 million, an increase of 14.6% versus third quarter of 2021, and an increase of 50.2% year over year
    • License and transaction fee revenue of $38.2 million, an increase of 10.2% versus third of quarter 2021 and an increase of 37.3% year over year
    • Equipment revenue of $10.8 million, an increase of 33.6% versus third quarter of 2021 and an increase of 124.5% year over year
  • Active Devices, defined as devices that have communicated or transacted with the Company in the last 12 months, totaled 1.09 million at the end of the fourth quarter of 2021 compared to 1.08 million at the end of the fourth quarter of 2020, an increase of 1.4%
  • Active Customers, defined as customers that have at least one Active Device, totaled 19,800 at the end of the fourth quarter of 2021 compared to 17,200 at the end of the fourth quarter of 2020, an increase of approximately 15%
  • Gross margin of 30.2% compared with 34.0% in the prior year period.
    • Transactions revenues were significantly higher in the current quarter than the prior year, resulting in L&T margins of 39.3% compared to 42.3% in the prior year quarter
    • Equipment margin improved to negative 2.3% compared to 14.1% in the prior year quarter.
  • Operating loss of $0.5 million for the quarter ended June 30, 2021 compared to operating loss of $10.4 million in the prior year period, driven primarily by a $3.7 million increase in gross profit and a $6.2 million reduction in operating expenses
  • GAAP Net income applicable to common shares of $2.7 million, or $0.04 per share compared to net loss applicable to common shares of $11.4 million, or $0.18 per share in the prior year period
  • Adjusted EBITDA1 of $5.0 million compared to ($2.1) million in the prior year period

Business Highlights:

  • Record hardware shipped in the fourth quarter of fiscal year 2021.
  • Exceeded pre-COVID peaks in transaction dollar volumes in June.
  • Continued to acquire new customers while expanding amongst existing customers. The Company signed two enterprise customers to the Seed platform – Elite Refreshment Services and Vend Buffet/Lufkin Coke; and there is steady adoption of Seed Cashless+ amongst SMB customers, including V-Enders, who are managing most of their machines using the software.
  • In August, the Company hosted its inaugural Cantaloupe Innovation Summit at The NAMA Show 2021, showcasing new products and services. To learn more about the products and services introduced, please see the video of the summit, or read the press release.
  • Introduced ePort® Engage Series, giving retailers the ability to captivate consumers in new ways and enabling truly frictionless purchasing.
  • Announced a strategic partnership with Bakkt Holdings to bring a new, cashless experience for consumers to spend digital assets at unattended retail devices.
  • Formed a commercial arrangement with Castles Technology to introduce a next-generation cashless solution.
  • Implemented Seed software to first US Global Connect franchisee customer.
  • Added to US Small-Cap Russell 2000® Index.
  • In August 2021, the Company announced the acquisition of Yoke Payments™ (“Yoke”), a Los Angeles, Calif.-based award-winning micro market payments company.

Fiscal Year 2022 Outlook:

For full fiscal year 2022, the Company expects the following:

  • Revenue to be between $200 million and $210 million
  • GAAP Net loss applicable to common shares to be between $(7) million and $(5) million
  • Adjusted EBITDA1 to be between $8.5 million and $10.5 million

1 Adjusted earnings before income taxes, depreciation, and amortization (“Adjusted EBITDA”) is a non-GAAP financial measure which is not required by or defined under GAAP. We use this non-GAAP financial measure for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. See Reconciliations of Non-GAAP Measures for a reconciliation U.S. GAAP net income (loss) to Adjusted EBITDA.

Webcast and Conference Call:

Cantaloupe will host a conference call and webcast at 4:30 p.m. Eastern Time today. To participate in the conference call, please dial + 1 (866) 393-1608, approximately 10 minutes prior to the call. International callers should dial +1 (224) 357-2194. Please reference conference ID # 7894196. A live webcast of the conference call will be available at: https://cantaloupeinc.gcs-web.com/events-and-presentations. Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software.

A telephone replay of the conference call will be available from 7:30 p.m. Eastern Time on September 2, 2021 until 7:30 p.m. Eastern Time on September 5, 2021 and may be accessed by calling +1 (855) 859-2056 (domestic dial-in) or +1 (404) 537-3406 (international dial-in) and reference conference ID # 7894196.

An archived replay of the conference call will also be available in the investor relations section of the Company's website.

About Cantaloupe, Inc.

Cantaloupe, Inc. is a software and payments company that provides end-to-end technology solutions for the unattended retail market. Cantaloupe is transforming the unattended retail community by offering one integrated solution for payments processing, logistics and back-office management. The Company’s enterprise-wide platform is designed to increase consumer engagement and sales revenue through digital payments, digital advertising and customer loyalty programs, while providing retailers with control and visibility over their operations and inventory. As a result, customers ranging from vending machine companies to operators of micro-markets, gas and car charging stations, laundromats, metered parking terminals, kiosks, amusements and more, can run their businesses more proactively, predictably and competitively.

Discussion of Non-GAAP Financial Measures:

This press release contains discussion of adjusted EBITDA, a non-GAAP financial measure which is not required or defined under GAAP (Generally Accepted Accounting Principles). Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Reconciliations between non-GAAP financial measures and the most comparable GAAP financial measures are set forth below.

We use this non-GAAP financial measure for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We believe that this non-GAAP financial measure provides useful information about our operating results, enhances the overall understanding of past financial performance and future prospects and allows for greater transparency with respect to metrics used by our management in its financial and operational decision making. The presentation of this financial measure is not intended to be considered in isolation or as a substitute for the financial measures prepared and presented in accordance with GAAP, including our net income or net loss or net cash used in operating activities. Management recognizes that non-GAAP financial measures have limitations in that they do not reflect all of the items associated with our net income or net loss as determined in accordance with GAAP, and are not a substitute for or a measure of our profitability or net earnings. Adjusted EBITDA is presented because we believe it is useful to investors as a measure of comparative operating performance. Additionally, we utilize Adjusted EBITDA as a metric in our executive officer and management incentive compensation plans.

We define Adjusted EBITDA as U.S. GAAP net loss before (i) interest income (ii) interest expense on debt and reserves (iii) income tax expense (iv) depreciation (v) amortization, (vi) stock-based compensation expense (vii) non-recurring fees and charges that were incurred in connection with the 2019 Investigation and financial statement restatement activities as well as proxy solicitation costs and (viii) certain other significant infrequent or unusual losses and gains that are not indicative of our core operations.

See reconciliation below for a description of itemized EBITDA adjustments.

Forward-looking Statements:

All statements other than statements of historical fact included in this release, including without limitation Cantaloupe’s future prospects and performance, the business strategy and the plans and objectives of Cantaloupe's management for future operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this release, words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions, as they relate to Cantaloupe or its management, may identify forward-looking statements. Such forward-looking statements are based on the reasonable beliefs of Cantaloupe's management, as well as assumptions made by and information currently available to Cantaloupe's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to the incurrence by Cantaloupe of any unanticipated or unusual non-operational expenses which would require us to divert our cash resources from achieving our business plan; the uncertainties associated with COVID-19, including its possible effects on Cantaloupe’s operations, financial condition and the demand for Cantaloupe’s products and services; the ability of Cantaloupe to predict or estimate its future quarterly or annual revenue and expenses given the developing and unpredictable market for its products; the ability of Cantaloupe to retain key customers from whom a significant portion of its revenues is derived; the ability of Cantaloupe to compete with its competitors to obtain market share; the ability of Cantaloupe to make available and successfully upgrade current customers to new standards and protocols; whether Cantaloupe's existing or anticipated customers purchase, rent or utilize ePort or Seed devices or our other products or services in the future at levels currently anticipated by Cantaloupe; the ability of Cantaloupe to execute on mergers, acquisitions and/or strategic alliances, including the timing and closing of acquisitions and our ability to integrate and operate such acquisitions consistent with our forecasts; disruptions to our systems, breaches in the security of transactions involving our products or services, or failure of our processing systems; or other risks discussed in Cantaloupe’s filings with the U.S. Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended June 30, 2020 and its Quarterly Reports on Form 10-Q for the quarters ended September 30, 2020, December 31, 2020 and March 31, 2021. Readers are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statement made by us in this release speaks only as of the date of this release. Unless required by law, Cantaloupe does not undertake to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events. If Cantaloupe updates one or more forward-looking statements, no inference should be drawn that Cantaloupe will make additional updates with respect to those or other forward-looking statements.

-- F-CTLP

Cantaloupe, Inc.

Consolidated Balance Sheets

 

 

As of June 30,

($ in thousands, except per share data)

2021

2020

 

Assets

Current assets:

 

 

Cash and cash equivalents

$

88,136

 

$

31,713

 

Accounts receivable, net

27,470

 

17,273

 

Finance receivables, net

7,967

 

7,468

 

Inventory, net

5,292

 

9,128

 

Prepaid expenses and other current assets

2,414

 

1,782

 

Total current assets

131,279

 

67,364

 

 

 

 

Non-current assets:

 

 

Finance receivables due after one year, net

11,632

 

11,213

 

Property and equipment, net

5,570

 

7,872

 

Operating lease right-of-use assets

3,049

 

5,603

 

Intangibles, net

19,992

 

23,033

 

Goodwill

63,945

 

63,945

 

Other assets

2,205

 

1,993

 

Total non-current assets

106,393

 

113,659

 

 

 

 

Total assets

$

237,672

 

$

181,023

 

 

 

 

Liabilities, convertible preferred stock and shareholders’ equity

Current liabilities:

 

 

Accounts payable

$

36,775

 

$

27,058

 

Accrued expenses

26,460

 

30,265

 

Current obligations under long-term debt

675

 

3,328

 

Deferred revenue

1,763

 

1,698

 

Total current liabilities

65,673

 

62,349

 

 

 

 

Long-term liabilities:

 

 

Deferred income taxes

179

 

137

 

Long-term debt, less current portion

13,644

 

12,435

 

Operating lease liabilities, non-current

3,645

 

4,749

 

Total long-term liabilities

17,468

 

17,321

 

 

 

 

Total liabilities

$

83,141

 

$

79,670

 

Commitments and contingencies

 

 

Convertible preferred stock:

 

 

Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preferences of $21,447 and $20,779 at June 30, 2021 and 2020, respectively

3,138

 

3,138

 

Shareholders’ equity:

 

 

Preferred stock, no par value, 1,800,000 shares authorized

 

 

Common stock, no par value, 640,000,000 shares authorized, 71,258,047 and 65,196,882 shares issued and outstanding at June 30, 2021 and 2020, respectively

462,775

 

401,240

 

Accumulated deficit

(311,382

)

(303,025

)

Total shareholders’ equity

151,393

 

98,215

 

Total liabilities, convertible preferred stock and shareholders’ equity

$

237,672

 

$

181,023

 

 

Cantaloupe, Inc.

Consolidated Statements of Operations

 

(Unaudited)

Three months ended

Year ended

June 30,

June 30,

($ in thousands, except per share data)

2021

2020

2021

2020

 

Revenues:

 

 

 

 

License and transaction fees

$

38,234

 

$

27,843

 

$

139,242

 

$

133,167

 

Equipment sales

10,784

 

4,802

 

27,697

 

29,986

 

Total revenue

49,018

 

32,645

 

166,939

 

163,153

 

 

 

 

 

 

Cost of sales:

 

 

 

 

Cost of license and transaction fees

23,202

 

16,068

 

83,617

 

82,980

 

Cost of equipment sales

11,034

 

5,480

 

29,296

 

33,900

 

Total cost of sales

34,236

 

21,548

 

112,913

 

116,880

 

 

 

 

 

 

Gross profit

14,782

 

11,097

 

54,026

 

46,273

 

 

 

 

 

 

Operating expenses:

 

 

 

 

Selling, general and administrative

14,253

 

14,518

 

58,624

 

61,748

 

Investigation, proxy solicitation and restatement expenses

 

5,861

 

 

19,810

 

Depreciation and amortization

996

 

1,098

 

4,107

 

4,307

 

Total operating expenses

15,249

 

21,477

 

62,731

 

85,865

 

 

 

 

 

 

Operating loss

(467

)

(10,380

)

(8,705

)

(39,592

)

 

 

 

 

 

Other income (expense):

 

 

 

 

Interest income

181

 

606

 

1,159

 

1,595

 

Interest expense

(43

)

(1,686

)

(4,013

)

(2,597

)

Other Income

3,224

 

 

3,224

 

 

Total other income (expense), net

3,362

 

1,080

 

370

 

(1,002

)

 

 

 

 

 

Gain (loss) before income taxes

2,895

 

(11,460

)

(8,335

)

(40,594

)

Provision (benefit) for income taxes

(237

)

46

 

(370

)

(1

)

 

 

 

 

 

Net income (loss)

2,658

 

(11,414

)

(8,705

)

(40,595

)

Preferred dividends

 

 

(668

)

(668

)

Net income (loss) applicable to common shares

$

2,658

 

$

(11,414

)

$

(9,373

)

$

(41,263

)

Net income (loss) per common share

 

 

 

 

 

 

 

 

Basic and diluted

$

0.04

 

$

(0.18

)

$

(0.14

)

$

(0.66

)

 

Cantaloupe, Inc.

Consolidated Statements of Cash Flows

 

 

Year ended June 30,

($ in thousands)

2021

2020

 

Cash flows from operating activities:

 

 

Net loss

$

(8,705

)

$

(40,595

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

Stock-based compensation

9,075

 

3,029

 

Interest and amortization of debt discount

2,735

 

1,283

 

Reimbursement of shareholder proxy solicitation costs

 

4,500

 

Provision for expected losses

1,236

 

2,958

 

Provision for inventory reserve

693

 

681

 

Depreciation and amortization included in operating expenses

4,107

 

4,307

 

Depreciation included in cost of sales for rental equipment

1,405

 

2,710

 

Property and equipment write-off

1,658

 

 

Gain on extinguishment of debt

(3,065

)

 

Operating lease right-of-use asset impairment

1,578

 

 

Other

1,104

 

2,103

 

Changes in operating assets and liabilities:

 

 

Accounts receivable

(10,126

)

1,818

 

Finance receivables

(1,877

)

547

 

Inventory

3,142

 

1,463

 

Prepaid expenses and other assets

(847

)

(563

)

Accounts payable and accrued expenses

7,013

 

2,988

 

Operating lease liabilities

(1,014

)

(1,384

)

Deferred revenue

65

 

16

 

Net cash provided by (used in) operating activities

8,177

 

(14,139

)

 

 

 

Cash flows from investing activities:

 

 

Purchase of property and equipment

(1,838

)

(2,538

)

Proceeds from sale of property and equipment

10

 

44

 

Net cash used in investing activities

(1,828

)

(2,494

)

 

 

 

Cash flows from financing activities:

 

 

Cash used in retirement of common stock

 

 

Proceeds from long-term debt issuance by Antara, net of issuance costs paid to Antara

 

14,248

 

Proceeds from equity issuance by Antara, net of issuance costs paid to Antara

 

17,879

 

Proceeds from PPP Loan

 

3,065

 

Payment of repurchase of common stock awards

 

 

Payment of third-party debt issuance costs

 

(1,980

)

Proceeds from long-term debt issuance by JPMorgan Chase Bank, N.A., net of debt issuance costs

14,550

 

 

Repayment of long-term debt

(15,744

)

(2,522

)

Proceeds from (repayments of) Revolving Credit Facility

 

(10,000

)

Proceeds from private placement

55,008

 

 

Payment of equity issuance costs

(2,618

)

 

Payment of Antara prepayment penalty and commitment termination fee

(1,200

)

 

Proceeds from exercise of common stock options

78

 

192

 

Net cash provided by (used in) financing activities

50,074

 

20,882

 

 

 

 

Net increase (decrease) in cash and cash equivalents

56,423

 

4,249

 

Cash and cash equivalents at beginning of year

31,713

 

27,464

 

Cash and cash equivalents at end of year

$

88,136

 

$

31,713

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

Interest paid in cash

$

1,055

 

$

1,314

 

 

Cantaloupe, Inc.

Reconciliation of U.S. GAAP Net Loss to Adjusted EBITDA

(Unaudited)

 

 

Year ended June 30,

($ in thousands)

2021

2020

 

 

 

Net loss

$

(8,705

)

$

(40,595

)

Less: interest income

(1,159

)

(1,595

)

Plus: interest expense

4,013

 

2,597

 

Plus: income tax provision

370

 

1

 

Plus: depreciation expense included in cost of sales for rentals

1,404

 

2,711

 

Plus: depreciation and amortization expense in operating expenses

4,107

 

4,307

 

EBITDA

30

 

(32,574

)

Plus: stock-based compensation (a)

9,075

 

3,029

 

Plus: investigation, proxy solicitation and restatement expenses (b)

 

19,810

 

Plus: asset impairment charge (c)

1,578

 

 

Less: gain on extinguishment of debt (d)

(3,065

)

 

Adjusted EBITDA

7,618

 

(9,735

)

(a)

 

As an adjustment to EBITDA, we have excluded stock-based compensation, as it does not reflect our cash-based operations.

(b)

 

As an adjustment to EBITDA, we have excluded the professional fees incurred in connection with the non-recurring costs and expenses related to the 2019 Investigation, financial statement restatement activities, and proxy solicitation costs because we believe that they represent charges that are not related to our core operations.

(c)

 

As an adjustment to EBITDA, we have excluded the non-cash impairment charges related to long-lived operating lease right-of-use assets because we believe that these do not represent charges that are related to our core operations.

(d)

 

As an adjustment to EBITDA, we have excluded the one-time gain related to the forgiveness of our PPP loan.

 

Cantaloupe, Inc.

Reconciliation of U.S. GAAP Net Loss to Adjusted EBITDA

(Unaudited)

 

 

Three months ended June 30,

($ in thousands)

2021

2020

U.S. GAAP net income (loss)

$

2,658

 

$

(11,414

)

Less: interest income

(181

)

(607

)

Plus: interest expense

43

 

1,686

 

Plus: income tax provision

237

 

(45

)

Plus: depreciation expense included in cost of sales for rentals

349

 

727

 

Plus: depreciation and amortization expense in operating expenses

996

 

1,098

 

EBITDA

4,102

 

(8,555

)

Plus: stock-based compensation (a)

2,709

 

576

 

Plus: investigation, proxy solicitation and restatement expenses (b)

 

5,861

 

Plus: asset impairment charge (c)

1,245

 

 

Less: gain on extinguishment of debt (d)

(3,065

)

 

Adjusted EBITDA

4,991

 

(2,118

)

(a)

 

As an adjustment to EBITDA, we have excluded stock-based compensation, as it does not reflect our cash-based operations.

(b)

 

As an adjustment to EBITDA, we have excluded the professional fees incurred in connection with the non-recurring costs and expenses related to the 2019 Investigation, financial statement restatement activities, and proxy solicitation costs because we believe that they represent charges that are not related to our core operations.

(c)

 

As an adjustment to EBITDA, we have excluded the non-cash impairment charges related to long-lived operating lease right-of-use assets because we believe that these do not represent charges that are related to our core operations.

(d)

 

As an adjustment to EBITDA, we have excluded the one-time gain related to the forgiveness of our PPP loan.

 

Media and Investor Relations Contact:
Alicia V. Nieva-Woodgate
Cantaloupe, Inc.
+1 720.445.4220
anievawoodgate@cantaloupe.com

Investor Relations:
ICR, Inc.
cantaloupeIR@icrinc.com

Source: Cantaloupe, Inc.