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CarLotz Announces Record Revenue and Retail Unit Sales in First Quarter 2021

First Quarter Revenue Growth of 123% to $56.6 million, Ahead of Expectations First Quarter Unit Sales Grew 76% to 2,554, Ahead of Expectations RICHMOND, Va., May 10, 2021 (GLOBE NEWSWIRE) — CarLotz, Inc. (“CarLotz” or the “Company”), a leading consignment-to-retail used vehicle marketplace, today announced financial results for the first quarter ended March 31, 2021. Highlights of First Quarter 2021 Financial Results Net revenues increased 123% to $56.6 million from $25.4 million in the same period in 2020Retail unit sales were 2,554 compared to 1,453 in the prior year period, an increase of 76%Net Loss attributable to common shareholders was $(15.0) million, or $(0.15) per diluted share, for the first quarter 2021 versus $(1.5) million, or $(0.03) per diluted share in the prior year periodAdjusted EBITDA was $(16.9) million compared to $(1.4) million in the first quarter of 2020 Michael Bor, Chief Executive Officer and co-founder of CarLotz commented: “We are excited to announce that, in advance of much of the growth we are driving this year through new hub development and nationwide expansion, we already are posting a 123% growth in revenue. We sold a record 2,554 retail units during the first quarter, opened three new hubs in Seattle, WA, Merritt Island, FL and Nashville, TN. And, we have announced planned new hub openings in Charlottesville, VA, Bakersfield, CA, Highland Park, IL, and Clearwater, FL in the coming months. We have been very pleased with our new hub performance to date and have signed close to a dozen leases and have several more leases under negotiation for 2021 and 2022 sites.” The following compares our first quarter results to our previously provided first quarter guidance: GuidanceResults New Hub OpeningsThreeThreeMet ExpectationsRetail Units Sold1,900 to 2,100 2,554Exceeded ExpectationsNet Revenue$42 to $46 million$56.6 millionExceeded ExpectationsGross Profit$1.6 to $2.0 million$2.0 millionMet ExpectationsRetail Gross Profit per Unit (“Retail GPU”)$1,300 to $1,500$1,182Below Expectations SG&A Expenses$17 to $19 million$18.9 million, excluding non-cash stock compensation expense of $42 millionMet ExpectationsNet Loss$(16) to $(15) million$(15) millionMet Expectations For 2021, the Company confirms its previous guidance, with certain changes noted below, and expects the following: 2021 GuidanceNew Hub Openings14 to 16 hub openings, most of which are expected to open in the back half of the yearNo changeRetail Units Sold18,000 to 20,000 with 13,000 to 15,000 in the second half of yearNo changeNet Revenue$335 to $375 millionNo changeGross Profit$30 to $37 millionNo changeRetail GPU$1,800 to $2,000No changeSG&A Expenses$103 to $108 million, excluding non-cash stock compensation expense expected to be approximately $52 millionProviding separate guidance for SG&A and non-cash stock compensation expenseAdjusted EBITDA*$(79) to $(67) millionProviding Adjusted EBITDA guidance instead of Net Loss guidance as a result of the change in the accounting treatment of the Company’s warrantsWeighted Average Common Stock Shares Outstanding111 millionUpdated from 113.6 million to 111 millionCapital Expenditures$45 to $50 millionNo change *A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for our full year 2021 guidance is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, these costs and expenses that may be incurred in the future. We have provided a reconciliation of GAAP to non-GAAP financial measures for our first quarter 2021 in the Reconciliation of Non-GAAP Financial Measures section that follows. Webcast and Conference Call Information A conference call to discuss the first quarter 2021 financial results is scheduled for today, May 10, 2021 at 5:30 pm ET. Interested parties may listen to the conference call via telephone by dialing 1-833-962-1461, or for international callers, 1-929-517-0392. A telephone replay will be available until 11:59 pm ET on May 17, 2021 and can be accessed by dialing 1-855-859-2056, or for international callers, 1-404-537-3406 and entering replay Pin number: 8006869. The conference call webcast will be available at www.investors.carlotz.com. About CarLotz, Inc. CarLotz is a used vehicle consignment and Retail Remarketing™ business that provides our corporate vehicle sourcing partners and retail sellers of used vehicles with the ability to access the previously unavailable retail sales channel while simultaneously providing buyers with prices that are, on average, below those of traditional dealerships. Our mission is to create the world’s greatest vehicle buying and selling experience. We operate a technology-enabled buying, sourcing and selling model that offers a seamless omni-channel experience and comprehensive selection of vehicles while allowing for a fully contactless end-to-end e-commerce interface that enables no hassle buying and selling. Our proprietary Retail Remarketing™ technology provides our corporate vehicle sourcing partners with real-time performance metrics and data analytics along with custom business intelligence reporting that enables price and vehicle triage optimization between the wholesale and retail channel. Through our marketplace model, we generate significant value for both sellers and buyers through price, selection and experience. Forward-Looking Statements This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward-looking statements include statements that are not historical facts, such as statements concerning possible or assumed future actions, business strategies, events or results of operations, including statements regarding CarLotz’ expectations or predictions of future financial or business performance or conditions. Forward-looking statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions. Such statements are based on management’s current expectations and are not guarantees of future performance. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause such differences include those disclosed in CarLotz’ filings with the SEC, including those resulting from the impact of the ongoing Covid-19 pandemic on our business and general business and economic conditions and our ability to successfully execute our geographic expansion plans. Forward-looking statements speak only as of the date they are made, and CarLotz is under no obligation, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Investors: [email protected] Media: [email protected] CarLotz, Inc. and Subsidiaries — Condensed Consolidated Balance Sheets (unaudited) (In thousands, except share data) March 31,2021 December 31,2020 Assets Current Assets: Cash and cash equivalents $74,362 $2,208 Restricted cash 227 605 Marketable securities – at fair value 173,644 1,032 Accounts receivable, net 9,324 4,132 Inventories 9,311 11,202 Other current assets 6,655 6,679 Total Current Assets 273,523 25,858 Marketable securities – at fair value 44,780 — Property and equipment, net 2,349 1,868 Capitalized software 2,554 — Lease vehicles, net 58 173 Other assets 3,337 299 Total Assets $326,601 $28,198 Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit) ​ Current Liabilities: ​ Long-term debt, current $55 $6,370 Floor plan notes payable 4,125 6,039 Accounts payable 9,423 6,283 Accrued transaction expenses — 6,052 Accrued expenses 11,150 3,563 Accrued expenses – related party — 5,082 Other current liabilities 815 256 Total Current Liabilities 25,568 33,645 Long-term debt, less current portion 1,250 2,999 Redeemable convertible preferred stock tranche obligation — 2,832 Earnout shares liability 42,438 — Merger warrant liability 26,667 — Other liabilities 1,570 1,959 Total Liabilities 97,493 41,435 Commitments and Contingencies (Note 15) — — Redeemable Convertible Preferred Stock: ​ ​ Series A Preferred Stock $0.001 stated value; authorized 3,052,127 shares; after recapitalization there are no preferred shares issued or outstanding at March 31,2021 and December 31, 2020 — — Stockholders’ Equity (Deficit): ​ Common stock, $0.0001 par value; 500,000,000 authorized shares, 113,670,060 and 58,621,042 shares issued and outstanding at March 31, 2021 and December 31, 2020 11 6 Additional paid-in capital 278,272 20,779 Accumulated deficit (49,059) (34,037)Accumulated other comprehensive income (loss) (116) 15 Treasury stock, $0.001 par value; after recapitalization there are no treasury shares issued or outstanding at March 31, 2021 and December 31, 2020 — — Total Stockholders’ Equity (Deficit) 229,108 (13,237)Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) $326,601 $28,198 CarLotz, Inc. and Subsidiaries — Condensed Consolidated Statements of Operations (unaudited) (In thousands, except per share and share data) Three Months Ended March 31, 2021 2020 Revenues: ​ ​ Retail vehicle sales $50,383 $21,042 Wholesale vehicle sales 4,568 3,311 Finance and insurance, net 1,554 892 Lease income, net 107 145 Total Revenues 56,612 25,390 Cost of sales (exclusive of depreciation) 54,604 22,918 Gross Profit 2,008 2,472 Operating Expenses: ​ ​ Selling, general and administrative 18,873 3,916 Stock-based compensation expense 41,963 34 Depreciation and amortization expense 383 100 Management fee expense – related party 2 62 Total Operating Expenses 61,221 4,112 Loss from Operations (59,213) (1,640)Interest Expense 175 149 Other Income (Expense), net ​ Change in fair value of merger warrants liability 12,358 — Change in fair value of redeemable convertible preferred stock tranche obligation — 284 Change in fair value of earnout provision 31,846 — Other income 162 3 Total Other Income (Expense), net 44,366 287 Loss Before Income Tax Expense (15,022) (1,502)Income Tax Expense — 5 Net Loss $(15,022) $(1,507)Net loss per share, basic and diluted $(0.15) $(0.03)Weighted-average shares used in computing net loss per share, basic and diluted 100,817,385 58,621,041 CarLotz, Inc. and Subsidiaries — Condensed Consolidated Statements of Cash Flows (unaudited) (In thousands, except per share and share data) Three Months Ended March 31, 2021 2020 Cash Flow from Operating Activities Net loss $(15,022) (1,507)Adjustments to reconcile net loss to net cash used in operating activities Depreciation – property and equipment 105 51 Amortization and accretion – marketable securities 238 — Depreciation – lease vehicles 15 49 Loss on marketable securities — 13 Provision for doubtful accounts — 6 Stock-based compensation expense 41,963 34 Change in fair value of Merger warrants liability (12,358) (13)Change in fair value of earnout shares (31,846) — Change in fair value of debt issuance costs and stock warrant — 5 Change in fair value of redeemable convertible preferred stock tranche obligation — (284)Change in Operating Assets and Liabilities: Accounts receivable (5,192) 1,177 Inventories 1,991 1,790 Other current assets (5,868) 8 Other assets (3,038) 9 Accounts payable 3,140 (325)Accrued expenses 6,187 (54)Accrued expenses – related party (229) (50)Other current liabilities 559 67 Other liabilities (245) 150 Net Cash (Used in)/Provided by Operating Activities (19,600) 1,126 Cash Flows from Investing Activities Purchase of property and equipment (586) (10)Capitalized website and internal-use software costs (1,154) — Purchase of marketable securities (217,689) (421)Proceeds from sales of marketable securities 59 18 Purchase of lease vehicles — (246)Net Cash Used in Investing Activities (219,486) (659)Cash Flows from Financing Activities Payments made on long-term debt — (2)PIPE Issuance 125,000 — Merger financing 309,999 — Payment made on accrued dividends (4,853) — Payments to existing shareholders of Former CarLotz (62,693) — Transaction costs and advisory fees (47,579) — Payments made on cash considerations associated with stock options (2,465) — Repayment of Paycheck Protection Program loan (1,749) — Payments made on note payable (3,000) — Payments on floor plan notes payable (11,150) (8,847)Borrowings on floor plan notes payable 9,236 7,139 Net Cash Provided by/(Used in) Financing Activities 310,746 (1,710)Net Change in Cash and Cash Equivalents Including Restricted Cash 71,776 (1,243)Cash and cash equivalents and restricted cash, beginning 2,813 4,102 Cash and cash equivalents and restricted cash, ending $74,589 $2,859 Supplemental Disclosure of Cash Flow Information Cash paid for interest $402 $165 Supplementary Schedule of Non-cash Investing and Financing Activities: Transfer from lease vehicles to inventory $100 $199 Redeemable convertible preferred stock distributions accrued — 457 KAR/AFC exercise of stock warrants (144) — KAR/AFC conversion of notes payable (3,625) — Convertible redeemable preferred stock tranche obligation expiration (2,832) — Capitalized website and internal use software costs accrues (1,400) — CarLotz, Inc. and Subsidiaries — Results of Operations, Retail Gross Profit per Unit (unaudited) (In thousands, except per unit metrics) ​ Three Months Ended March 31, ​ 2021 2020 Change Change Revenue: Retail vehicle sales $50,383 $21,042 $29,341 139%Wholesale vehicle sales 4,568 3,311 1,257 38%Finance and insurance, net 1,554 892 662 74%Lease income, net 107 145 (38) (26)%Total revenues 56,612 25,390 31,222 123%Cost of sales: ​ ​ Retail vehicle cost of sales $48,917 $19,555 $29,362 150%Wholesale vehicle cost of sales 5,687 3,363 2,324 69%Total cost of sales $54,604 $22,918 $31,686 138%Gross profit: ​ ​ Retail vehicle gross profit $1,466 $1,487 $(21) (1)%Wholesale vehicle gross profit (1,119) (52) (1,067) (2052)%Finance and insurance gross profit 1,554 892 662 74%Lease income, net 107 145 (38) (26)%Total gross profit $2,008 $2,472 $(464) (19)% Retail gross profit per unit(1): ​ ​ ​ Retail vehicles gross profit $1,466 $1,487 (21) (1)%Finance and insurance gross profit 1,554 892 662 74%Total retail vehicles and finance and insurance gross profit 3,020 2,379 641 27% Retail vehicles unit sales 2,554 1,453 (1,101) (76)%Retail vehicles gross profit per unit $1,182 $ 1,637 $ (455) (28)% (1) Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. CarLotz, Inc. and Subsidiaries — EBITDA and Adjusted EBITDA (unaudited) (In thousands, except share data) Three Months Ended 2021 2020 Change Net Loss Attributable to Common Stockholders $(15,022) $(1,507) $(13,515)Adjusted to exclude the following: Interest expense 175 149 26 Income tax expense — 5 (5)Depreciation and amortization expense 383 100 283 EBITDA $(14,464) $(1,253) $(13,211)Other expense (162) (3) (159)Stock compensation expense 41,963 34 41,929 Management fee expense – related party 2 62 (60)Change in fair value of warrants liability (12,358) — (12,358)Change in fair value of redeemable convertible preferred stock tranche obligation — (284) 284 Change in fair value of earnout provision (31,846) — (31,846)Adjusted EBITDA $(16,865) $(1,444) $(15,421)

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