Gross Margin Exceeds 30% on Increasing ASP and Solid Operational Execution; Completes Uplist to NASDAQ and $25 Million Public Offering
Manchester, NH, Aug. 16, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire -- Minim, Inc. (NASDAQ: MINM) (“Minim”), the creator of intelligent networking products under the globally recognized Motorola brand, today reported second quarter financial results for the period ended June 30, 2021.
Q2 2021 Financial Highlights:
- Net revenue of $14.9 million, up 45% year over year from $10.3 million in Q2 2020, exceeding the growth rate of 26% recorded in Q2 2020.
- Revenue Bookings of $15.6 million; total deferred revenue as of June 30, 2021 increased 279% compared to Q1 2021.
- Continued improvement in gross margin at 30.1%, up 940 basis points year-over-year compared to 20.7% in Q2 2020.
- Net loss of $1.6 million, including a $500 thousand one-time material scrap expense within cost of goods sold marking the completion of a warehouse organization and optimization project and the use of increased air freight to meet the significant increase in Amazon Prime Day demand experienced by Minim this year, compared to a net loss of $1.5 million in Q2 2020 and a net loss of $546,000 in Q1 2021.
Recent Business Highlights
- Amazon Prime Day sales exceeded the prior four years’ Prime Day performance combined.
- Added retailers HSN, Home Depot, Lowes, Sam’s Club, and BJ’s Wholesale to its sales channels.
- Awarded first of two software patents that are fundamental to intelligent WiFi.
- Selected by South African service provider Vox to provide AI-driven cloud software platform, mobile app, and customer care portal to underpin their Vox Wi-Fi Home Manager offering on MikroTik routers; Minim’s mobile app offers subscribers WiFi management, network security, parental controls, and more.
- Began trading as a NASDAQ listed company on July 7, 2021.
- Closed a $25 million public offering of common stock for general corporate and working capital purposes, which may include new product development and expansion into global markets.
- Completed trademark asset sale to Zoom Video Communications, Inc. for $4.0 million.
Gray Chynoweth, Chief Executive Officer of Minim, said, “Our second quarter results reflect accelerating momentum fueled by increasing adoption of our products, deeper market penetration, higher average price points for our bundled solutions and effective management of our supply chain. We delivered exceptional year-over-year growth at a rate of 45%, despite the second quarter typically being our seasonally slower quarter and the macro-level supply chain challenges that are impacting businesses globally. Our operational execution reinforces our confidence in continued growth and expansion to deliver meaningful value for our shareholders.”
Sean Doherty, Chief Financial Officer of Minim, commented, “Revenue Bookings grew by more than 50% year-over-year versus Q2 2020 elevating our deferred revenue balance by an additional $738,000 in the second quarter, reflecting increased sales of subscription services and extending our runway for future revenue recognition. The health of our balance sheet was reinforced with a capital raise of $25 million subsequent to quarter end, equipping us with the financial resources to invest in continued growth.”
Deferred revenue as of June 30, 2021 was $1.0 million compared with $0.3 million as of March 31, 2021.
Net loss in the second quarter of 2021 was $1.6 million compared to a net loss of $1.5 million in the second quarter of 2020. Sequentially, this compares to a net loss of $546,000 in the first quarter of 2021. Net loss per share on a GAAP basis for the second quarter of 2021 was ($0.04), compared with ($0.07) in the comparable period of Q2 2020, and ($0.02) in the prior quarter in Q1 2021.
Non-GAAP Adjusted EBITDA in the second quarter of 2021 was ($0.3) million when adjusted for $0.2 million in stock based compensation expense and $0.7 million of revenue bookings, a ($0.8) million year over year decrease compared to $0.5 million in the second quarter of 2020, which was normalized for $1.0 million of tariff expense and $0.9 million of air freight expense. On a sequential quarter over quarter basis, this represents a ($0.6) million decrease compared to a gain of $0.3 million in the first quarter of 2021.
At the end of Q2 2021, the company had $1.6 million cash, cash equivalents and restricted cash compared to $1.2 million at the end of Q1 2021. The company had $2.8 million in availability for borrowing under its $13.0 million credit facility at June 30, 2021. The Q2 2021 ending cash balance has been subsequently increased with the closing of the $25 million (gross proceeds) public offering.
“Our trailing 12 month sales as of June 30th outperformed our product category in US retail by 17% according to NPD Group market research,” said Nicole Zheng, President and CMO of Minim. “This is evidence that we’re bringing stand-out products to market. We look forward to Back to School season sales and launching our powerful WiFi 6 product family and exciting mobile app features in the second half of the year. We continue to light up new and exciting retail sales channels in the U.S. and now India.”
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this news release contains the non-GAAP financial measures Adjusted EBITDA, which we define as GAAP net income (loss) plus depreciation of fixed assets and amortization of intangible assets, other (expense) income, net, income tax provision, Revenue Bookings (defined below), material one-time expenses and income, and stock-based compensation expenses, and Revenue Bookings, which we define as GAAP Revenue, which was $14.9 million for Q2 2021, plus the change in Deferred Revenue recorded within the financial reporting period being disclosed, which amounted to $0.7 million for Q2 2021.
We use these non-GAAP financial measures in internal forecasts and models when establishing internal operating budgets, supplementing the financial results and forecasts reported to our Board of Directors, and evaluating short-term and long-term operating trends in our operations. We believe that these measures provide an enhanced understanding of our underlying operational measures to manage the business, to evaluate performance compared to prior periods and the marketplace, and to establish operational goals.
Minim believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. These supplemental financial measures exclude temporary supplemental air freight resulting from supply chain interruptions resulting from a global pandemic; China tariffs as the company believes these costs are not part of normal business operations (the imposed tariff rates increased mid-2019 from 10% to 25% on the value of imported goods and remained at 25% until the company relocated its manufacturing source from China to Vietnam by June 2020); costs incurred and related to the merger with Zoom Connectivity, Inc. as the company deems these costs as one-time in nature; and the one-time income from the forgiveness of the Payroll Protection Program loan.
These non-GAAP financial measures should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. These financial measures may not be computed in the same manner as similarly titled measures used by other companies. We expect to continue to incur expenses similar to the financial adjustments described above and investors should not infer from our presentation of these non-GAAP financial measures that these costs are unusual, infrequent or non-recurring.
Conference Call Details Date/Time:
Minim will host a conference call today, August 16, 2021, at 8:30 a.m. ET to discuss these results. To participate, please access the live webcast at
https://ir.minim.com, or by dialing (866) 393-7958 (US) or (706) 643-5255 (international) and referencing code 3495449.