Waitr Holdings Inc., the Lake Charles-based mobile app food delivery business, went deeper into the red as the company reported a net loss of $220.1 million, or $2.89 per share, as of third quarter.
By comparison, Waitr lost $6.5 million during third quarter 2018.
About $192.1 million of the losses stemmed from goodwill and intangible asset impairment charges in addition to $2.2 million of non-cash stock compensation expenses.
Waitr has $52 million in cash on hand left, down from $72 million as of June 30.
Waitr, which has significant operations in Lafayette, generated $49.2 million in revenue during third quarter, up from $19.4 million during the same time frame last year. About $24 million of that total revenue stemmed from Bite Squad’s sales, the food delivery startup the company acquired this year.
Gross food sales during third quarter grew to $161.4 million compared to $77.7 million during third quarter last year. Of that, $74 million was related to Bite Squad. Gross food sales refer to food and beverage receipts in addition to taxes, tips and fees.
The company’s CEO, Adam Price, said the business made progress in streamlining operations and saw $2 million in cost savings during third quarter so far.
“We started implementing changes that are expected to result in an incremental $25 million to $30 million of annual savings in FY 2020,” Price said. “We remain dedicated to stabilizing the business in terms of cash flow and charting a clear path towards profitability.”
The company’s board of directors also completed its strategic alternative review and decided to keep the company publicly traded and independent but remains “open to potential value creating opportunities.”
It declined to share future earnings, citing a lack of chief financial officer, who left in early November alongside two board members. Waitr’s leadership is in restructuring mode with a single goal – breaking even – its top executive told analysts on a conference call.
“It’s hard to comment on growth and what can be expected because the management team’s primary focus right now is controlling out cash and putting us on a very clear trajectory to a sustainable business, that’s the priority,” Price said. “We have to come back and show people that this is a sustainable business.”
Towards that goal, Waitr laid off about 300 workers this week and estimated that it will save $19 million in annual salary expenses as a result. The company cut its sales team in half and implemented a more automated process for sales and even driver route assignments. It was the second layoff in the past six months. It also decided to remotely manage some of its markets rather than have employees on the ground.
The company laid off most of its operations and dispatch staff in Minneapolis, the former headquarters of BiteSquad, in an effort consolidate operations in Lake Charles, according to the Star Tribune newspaper.
It is exiting 38 markets due to lack of performance, which were “clearly unprofitable”. For example, Waitr is halting delivery in Dothan, Alabama in early December – about a year after starting operations there. It’s also pulling out of Lincoln, Nebraska.
Several months ago, Waitr attempted to renegotiate contracts with higher fees among independent restaurants in an effort to spur higher volume sales. Since then, about 75% of restaurants have returned to Waitr, according to the company.
The average Waitr order was $36 and it had on average about 48,100 orders each day. It served more than 2.3 million diners as of third quarter, up from 842,500 one year ago. The company has seen an increase in market share in its strongest existing markets over the past three months.
Waitr’s stock was trading around 45 cents per share as of market close and dropped to 44 cents per share in after hours trading. It’s down from a 52-week peak of $14 per share in March. The company’s market capitalization was $34 million.
The company may be delisted from the Nasdaq stock exchange about a year after the company it went public if its stock price doesn’t rise above $1 per share by the end of November.