Amfil Technologies Inc (FUNN)

[Juancy]

Snakes & Lattes Inc. is pleased to report a 112% increase in year over year Q2FY22 revenue at $1,613,826, up from $721,907 for Q2FY21, with gross profits up from $566,178 to $1,223,002

Press Release | 02/10/2022

https://www.otcmarkets.com/stock/FUNN/news/Snakes--Lattes-Inc-is-pleased-to-report-a-112-increase-in-year-over-year-Q2FY22-revenue-at-1613826-up-from-721907-for-Q2?id=343257

SNAKES & LATTES INC. (OTC: FUNN) is pleased to report a 112% increase in year over year Q2FY22 revenue at $1,613,826, up from $721,907 for Q2FY21, with gross profits up from $566,178 to $1,223,002. The large increase in gross profits is due to numerous operational efficiencies gained over the past year. We continuously look for ways to increase this metric and are pleased with the result thus far.

Cash on hand at the end of the quarter was $41,771 with total assets of $3,978,593 over total liabilities of $8,837,167. The total outstanding common share count of the company is 746,374,343 as of December 31st, 2021. A significant increase in liabilities was due to the requirement of booking the subsidy loans from the government. About half a million will be forgiven and removed within this fiscal year.

The healthy increase in comparative year over year revenues for the quarter (Q2FY21 compared to Q2FY22) was anticipated as we began the road back to normal operations. We are quite satisfied after a long period of full pandemic related restrictions with the current trend. While we remain very optimistic going forward, the company has still had a number of challenges to manage due to Covid. The October to December quarter is seasonally our best quarter with extra holiday sales (games and gift cards) and additional revenues from company events. General patronage is also higher, but given the pandemic it is a bit more variable than normal years. The good news is, our customer base is very strong and we continue to see higher and higher attendance rates at all our locations for the capacity they allow. Even with setbacks, this positive trend has continue into Q3 as evidenced by the surge in patronage as soon as we reopened our Ontario locations post the most recent mandated covid closure.

During Q2, we had 5 locations either partially closed or operating at a reduced capacity. At this time, our locations are operating at a capped 50% total capacity. Canada locations are open 5 hours on weeknights and 12 hours on weekends. This is far from our standard 13 / 16. Fortunately, the impact is limited due to the size of our venues. We exercise covid protocols: Guests must present a valid Vaccination Pass, along with an ID, and we request stay seated at all times with a mask on when not eating. Other restrictions include we cannot facilitate groups over 10 guests. Reservations for a set period of 3 hours has had an impact on our bottom line, as we lose flexibility making seating arrangement sub-optimal. We expect some if not all restrictions to be lifted toward the end of month.

We also saw an increase in labor costs in our Ontario locations. This was anticipated as an increased cost, and part of doing business in the service / hospitality industry. The increases for Canadian locations were:

Server minimum wage increased from $12.55 to $15.00.

Kitchen staff wages increased by approximately $2-$3 per hour due to scarcity / labor shortages.

Despite the healthy positive trajectory and trend overall, we were just shy of our quarterly internal objective. This has been attributed to a lower than average year end close due to a large surge in covid cases. The last 10 days of December were not as lucrative as historic / pre-covid years.

With the newest Snakes & Lattes Inc. location Guelpth officially opening up during Q2, Snakes & Lattes has 7 fully operational locations. (within current covid restrictions) We also added to our key resources with the addition of our Marketing Director to handle location localization and social media. Connecting with our customers is paramount to success as we continue to build on our brand strength.

Tempe continues to lead the way as the exemplar location. After a record Q1, Tempe confirmed its good health in Q2 with revenue +4% and stable labor. Admission represents less than 15% of overall revenue for the location, while Food is almost at 50%. Changes in the Guest Average Spending are mainly due to menu price increases. Initiatives headed by Susan and her team have been working to introduce more localized food offerings, which have also had a positive effect of Average Customer Spend. Tempes revenue continues to be strong and consistent. Looking forward to significant social events such as March Madness and popular local farmers markets should continue to bring in high traffic to the location.

There are particular indicators important to the health of our locations, individual and aggregate. Currently, most of our indicators are in the Green. The trend is definitely positive and heading in the right direction as we emerge from the pandemic and look forward to its continuation.

Key Performance Indicators (KPIs):

CANADA Locations: 40% of total Revenue

USA Locations: 51% of total Revenue

Overall Revenue: Increase +34% between Q1 and Q2 FY22.

Gross Profit: Increased from 69% to 76% from the previous quarter.

Number of Customer Receipts: Increase +120% venue frequentation.

Guest Average Spending: Increase +17% compared to the same period. (Note as a trend, the first week of Feb. 2022 has yielded +51% compared to the same period 2 years ago.)

SPLH - Revenue per labor hour: The ratio is stable; training and onboarding of 20+ Staff members in Q2 had a large impact on labour.

% admission of total revenue (service charge of customers coming in to play games): Our ideal number is under 30% of total sales (excluding Retail, i.e. customers are spending more on food and beverage than only paying the boardgame fee.). We saw an overall decrease of 4% to 28%. This is well under the objective.

Revenue per Sq Ft: This indicator is important for a measure of operational efficiency. Despite the limited capacity and hours of operations, it is trending up. Q2 is +90% quarter over quarter.

As previously communicated, the company is working on a number of promising initiatives, which in turn is expected to continue to impact positively on the yearly aggregated growth. With the return to a more normal state of operations, we anticipate continued and consistent year over year growth as we continue to expand operations and increase revenue / improve efficiency in existing locations. Details will be released over the coming weeks on several projects.

A big thank you to all our supporters and loyal customers, we continue to serve in honor to create the best possible experience for our patrons. We have been humbled by the outpouring of support from our shareholders, staff, customers and local communities through the past 22 months since the beginning of the pandemic. In turn we have been able to and continue to serve, to grow, and at all times we keep the mission of Snakes and Lattes locations coast in coast at the forefront of our strategy.

See you at Snakes & Lattes!


About Snakes & Lattes Inc.

For further updates from Snakes & Lattes and its parent company Amfil Technologies Inc., please follow us on Twitter @AmfilTech

For more information regarding the company and its related subsidiaries please visit the following websites:

Amfil Technologies Inc. www.amfiltech.com

Snakes & Lattes Inc. www.snakesandlattes.com

Interloc-Kings Inc. http://www.interloc-kings.com