Mr. Roger Hardy reports

KITS EYECARE REPORTS FOURTH QUARTER AND FULL YEAR 2024 RESULTS

Kits Eyecare Ltd. has released its results for the fourth quarter and full year ended Dec. 31, 2024.

Fourth quarter 2024 financial and operational highlights

For the fourth quarter of 2024, compared with the fourth quarter of 2023:

• Revenue increased by 42 per cent to a record $44.8-million, compared with $31.7-million.
• Gross profit was $16.3-million or 36.3 per cent of revenue, compared with $11.1-million or 35.0 per cent of revenue.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) improved by $2.0-million to $2.9-million, compared with $900,000.
• Net income was $2.7-million, compared with a net loss of $500,000.
• Glasses revenue increased by 59.7 per cent to a record $6.5-million, compared with $4.1-million.

Full-year 2024 financial and operational highlights

For the full year 2024, compared with full year 2023:

• Revenue increased by 32 per cent to a record $159.3-million, compared with $120.5-million.
• Gross profit was $53.7-million or 33.7 per cent of revenue, compared with $40.8-million or 33.8 per cent of revenue.
• Adjusted EBITDA improved by $4.1-million to $6.4-million, compared with $2.3-million.

Management commentary

"Two thousand twenty-four was another record-setting year for Kits as we continued to build momentum and strengthen our leadership in the eyewear category," said Roger Hardy, co-founder and chief executive officer of Kits. "Our relentless focus on customer experience, paired with growing demand for the Kits brand, has been a key driver of our continued success and strong business growth. We saw record engagement throughout the year, driven by our commitment to quality, speed and value. The fourth quarter was a standout, with multiple record-breaking sales weeks and a major milestone of our first one million pairs of glasses delivered. As we move forward, we are energized by the momentum we've built, and remain committed to expanding our leadership position, deepening customer relationships and driving long-term value for all stakeholders."

Fourth quarter 2024 financial results

Revenue increased by 42 per cent to $44.8-million, compared with $31.7-million in the fourth quarter of 2023. The increase was primarily attributed to increasing recognition of the Kits brand in the North American e-commerce space, strong customer demand, operational efficiencies and strategic initiatives.

Gross profit increased by 47 per cent to $16.3-million, compared with $11.1-million in the fourth quarter of 2023, while gross margin increased by 130 basis points to 36.3 per cent, compared with 35.0 per cent in the fourth quarter of 2023. The increase was primarily due to balancing discounts and promotions targeting new customers with an emphasis on serving higher value new customers and returning customers.

Net income (loss) improved to $2.7-million, or nine cents per share (basic), compared with a net loss of $500,000, or two cents per share (basic), in the fourth quarter of 2023. The improvement was primarily attributable to an improvement in revenue, fulfilment and marketing efficiency and foreign exchange gain recognized.

EBITDA increased by $5.0-million to $4.9-million, compared with negative $100,000 in the fourth quarter of 2023, while adjusted EBITDA improved by 237 per cent to $2.9-million, compared with $900,000 in the fourth quarter of 2023. The improvement in adjusted EBITDA was primarily attributable to the increase in revenue and gross profit, driven by the company's continuous focus on profitability as Kits finds leverage in its operating expenses as its business grows and successfully continues to scale.

On Dec. 31, 2024, cash and cash equivalents totalled $19.3-million, compared with $16.0-million on Dec. 31, 2023.

First quarter 2025 outlook

For the first quarter of 2025, Kits management expects revenue to be in the range of $46-million to $48-million, with adjusted EBITDA as a percentage of revenue between 4 per cent and 6 per cent.

Conference call

Kits management will host a conference call followed by a question-and-answer period. To access the call instantly, please register your name and phone number on-line.

The conference call will also be webcast live with a presentation and available for replay via the investor relations section of the company's website.

Date:  Wednesday, March 5, 2025

Time:  9 a.m. Eastern Time (6 a.m. Pacific Time)

North American toll-free number:  1-888-510-2154

Local Toronto dial-in number:  1-437-900-0527

Confirmation No.:  60627 followed by the pound key

Financial highlights

The selected financial information in the attached table is qualified in its entirety by and should be read conjunction with the company's consolidated financial statements for the years ended Dec. 31, 2024, and Dec. 31, 2023, and the accompanying notes, and the management's discussion and analysis (MD&A), which may be viewed on SEDAR+.

About Kits

Kits makes eyecare easy. Kits is a leading vertically integrated digital eyecare brand providing eyewear for eyes everywhere. The company offers customers access to a vast selection of contact lenses and eyeglasses, including its own exclusive Kits designed products, as well as a robust suite of on-line vision tools. The company's efficient digital platform, backed by its industry-leading manufacturing and designs, removes intermediaries and enables the company to offer great prices and deliver made to order personalized products with incredible care and accuracy. Kits is creating disruption in the industry by constantly pursuing cutting-edge technologies to enable the best customer experience, including on-line eyewear fitting tools and virtual try-on for glasses. Kits strives to delight its customers with its competitive prices, a convenient digital shopping experience, fast and reliable delivery options, and an unrelenting focus on earning its customers' lifelong trust.

Non-IFRS (international financial reporting standards) financial measures and industry metrics

This news release includes references to certain non-IFRS financial measures such as constant-currency revenue, EBITDA and adjusted EBITDA, and certain industry metrics. These financial measures and industry metrics are employed by the company to measure its operating and economic performance and to assist in business decision-making, as well as providing key performance information to senior management. The company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to evaluate the company's operating and financial performance. These financial measures are not defined under IFRS, nor do they replace or supersede any standardized measure under IFRS. Other companies in the company's industry may calculate these measures differently than Kits does, limiting their usefulness as comparative measures. Definitions and reconciliations of non-IFRS measures to the nearest IFRS measure and industry metrics can be found in the company's MD&A.

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