Minim, Inc.

Fourth quarter net revenue was $10.6 million, down 23.2% sequentially and up 1.4% year over year. Q4 gross margin was 19.9%, down from 22.3% in the prior quarter. Q4 net loss was $4.5 million, or $(0.10) per basic and diluted share, versus a $4.1 million loss, or $(0.09) per share, in Q3; Adjusted EBITDA was $(3.9) million versus $(3.2) million. Full-year 2022 revenue was $50.6 million, down 9%. At quarter end, cash and cash equivalents were $1 million, inventory was $25.4 million, and debt was $5.8 million. Management said post-year-end cost reductions should produce about 20% annualized savings, and it expects inventory to fall into the low $20 million range exiting Q1 and entering Q2 2023. It also reiterated a goal of reaching profitability and cash flow positive in the second half of 2023, with Support+ expected to launch in June and add to gross margin near the end of Q3 and into Q4.

Mehul Patel said the company spent 2022 realigning the business around consumer demand, ecommerce, and intelligent products, while improving working capital and the balance sheet. He emphasized that Minim is shifting away from the ISP business, which he called a drag on margins and cash flow, and toward premium subscription services such as Support+. His tone was constructive and confident, with repeated references to being on track for second-half 2023 profitability and having a much improved balance sheet.

Dustin Tacker focused on the quarter’s financial pressure and the cleanup of the balance sheet. He cited Q4 net revenue of $10.6 million, gross margin of 19.9%, a net loss of $4.5 million, Adjusted EBITDA of $(3.9) million, cash of $1 million, inventory of $25.4 million, and debt of $5.8 million; he also noted there was only $38,000 of availability on the credit line at December 31. He said cash declined mainly because the company paid down $5.3 million in accounts payable and accrued expenses, and reiterated that no capital raise is being considered at this time.

Analysts focused on the timeline to profitability, growth in 2023, inventory correction, and whether more capital would be needed. Management said Q1 should look broadly like internal expectations and still reflect historical cost levels, but savings from restructuring should begin to show after Q1; they also said profitability is targeted for the second half of 2023. On inventory, management said brick-and-mortar customers are rebuilding stock from the very low levels seen last year, and that most remaining inventory is still marketable with no near-term obsolescence concern. On capital, management said there is no current plan for a raise and that a new $12 million asset-backed facility would replace the SVB facility and improve borrowing flexibility.