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CarLotz Announces Second Quarter 2021 Financial Results

Unit Sales Grew 46% to 2,009, Ahead of Expectations

Revenue Growth of 92% to $50.8 million

Record Gross Profit of $4.2 million and GPU Ahead of Expectations

Withdraws Previously Provided 2021 Outlook due to Channel Constraints

RICHMOND, Va., Aug. 09, 2021 (GLOBE NEWSWIRE) -- CarLotz, Inc. (“CarLotz” or the “Company”), a leading consignment-to-retail used vehicle marketplace, today announced financial results for the second quarter ended June 30, 2021.

Highlights of Second Quarter 2021 Financial Results

  • Net revenues increased 92% to $50.8 million from $26.4 million in the same period in 2020

  • Gross Profit increased 53% to $4.2 million from $2.7 million in the prior year period

  • Retail Gross Profit per Unit (“Retail GPU”) increased 17% to $2,175 from $1,858 in the prior year period

  • Retail unit sales were 2,009 compared to 1,376 in the prior year period, an increase of 46%

  • Net Loss attributable to common shareholders was $(7.2) million, or $(0.06) per diluted share, for the second quarter 2021 versus $(0.2) million, or $(0.00) per diluted share in the prior year period

  • Adjusted EBITDA was $(15.2) million compared to $(0.3) million in the second quarter of 2020

“We are very pleased with our second quarter results, having met our unit guidance and significantly outperforming our GPU guidance,” said Michael Bor, Co-Founder and CEO of CarLotz. “Despite a dynamic operating environment, the quarter was highlighted by record Gross Profit and four new hub openings, in addition to the announcement of the opening of six additional hubs. I am extremely proud of the hard work and commitment demonstrated by the entire team over the last six months since we became a public company, including doubling our number of hub locations, hiring experienced talent across the company, and executing on significant technology and marketing initiatives to provide a structure to support significant growth.”

Mr. Bor continued, “Looking ahead to the second half of the year, we recognize the macro environment remains challenging to our business model and we will continue to make the strategic and tactical investments necessary to further establish the base on which to scale into a nationwide vehicle consignment and sales marketplace. To that end, we remain very confident in our long-term consignment strategy and value proposition and are intensely focused on driving long-term value for all our stakeholders.”

Fiscal 2021 Outlook

As a result of the continued disruption caused by the chip shortage and the corresponding lack of visibility into the wholesale market and commercial vehicle sourcing, the Company is withdrawing its previously provided financial outlook for fiscal 2021 at this time.

Qualitatively, the Company expects to see unit growth in the third quarter over the second quarter of 2021. Additionally, we have seen gross profit compression in the third quarter to date compared to the second quarter and we expect it to continue through the end of the year as a result of the Company’s reliance on competitively-sourced owned inventory until consignment volumes increase.

Webcast and Conference Call Information

A conference call to discuss the second quarter 2021 financial results is scheduled for today, August 9, 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 August 16, 2021 and can be accessed by dialing 1-855-859-2056, or for international callers, 1-404-537-3406 and entering replay Pin number: 9089546.

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 omnichannel 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 channels. 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:

CarLotzIR@icrinc.com

Media:

CarLotzPR@icrinc.com

CarLotz, Inc. and Subsidiaries — Condensed Consolidated Balance Sheet

(unaudited)

(In thousands, except share data)

June 30,
2021

December 31,
2020

Assets

Current Assets:

Cash and cash equivalents

$

83,576

$

2,208

Restricted cash

226

605

Marketable securities – at fair value

175,424

1,032

Accounts receivable, net

5,411

4,132

Inventories

47,469

11,202

Other current assets

6,253

6,679

Total Current Assets

318,359

25,858

Marketable securities – at fair value

3,481

Property and equipment, net

11,662

1,868

Capitalized software

9,898

Lease vehicles, net

337

173

Other assets

4,390

299

Total Assets

$

348,127

$

28,198

Liabilities, Redeemable Convertible Preferred Stock, Stockholders’ Equity (Deficit)

Current Liabilities:

Long-term debt, current

$

212

$

6,370

Floor plan notes payable

29,427

6,039

Accounts payable

8,782

6,283

Accrued transaction expenses

6,052

Accrued expenses

13,238

3,563

Accrued expenses – related party

5,082

Other current liabilities

5,425

256

Total Current Liabilities

57,084

33,645

Long-term debt, less current portion

7,579

2,999

Redeemable convertible preferred stock tranche obligation

2,832

Earnout provision

30,228

Merger warrant liability

26,341

Other liabilities

1,232

1,959

Total Liabilities

122,464

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 June 30, 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 June 30, 2021 and December 31, 2020

11

6

Additional paid-in capital

281,976

20,779

Accumulated deficit

(56,264

)

(34,037

)

Accumulated other comprehensive income

(60

)

15

Treasury stock, $0.001 par value; after recapitalization there are no treasury shares issued or outstanding at June 30, 2021 and December 31, 2020

Total Stockholders’ Equity (Deficit)

225,663

(13,237

)

Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

$

348,127

$

28,198

CarLotz, Inc. and Subsidiaries — Consolidated Statements of Operations

(unaudited)

(In thousands, except per share and share data)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenues:

Retail vehicle sales

$

44,230

$

23,652

$

94,613

$

44,694

Wholesale vehicle sales

4,660

1,725

9,228

5,036

Finance and insurance, net

1,780

895

3,334

1,787

Lease income, net

98

127

205

272

Total Revenues

50,768

26,399

107,380

51,789

Cost of sales (exclusive of depreciation)

46,586

23,670

101,190

46,588

Gross Profit

4,182

2,729

6,190

5,201

Operating Expenses:

Selling, general and administrative

19,386

3,073

38,259

6,989

Stock-based compensation expense

3,704

3

45,667

37

Depreciation and amortization expense

95

91

478

191

Management fee expense – related party

70

2

132

Total Operating Expenses

23,185

3,237

84,406

7,349

Loss from Operations

(19,003

)

(508

)

(78,216

)

(2,148

)

Interest Expense

184

107

359

256

Other Income (Expense), net

Change in fair value of merger warrants liability

325

12,683

Change in fair value of redeemable convertible preferred stock tranche obligation

345

629

Change in fair value of earnout provision

12,210

44,056

Other income (expense)

(553

)

61

(391

)

64

Total Other Income (Expense), net

11,982

406

56,348

693

Loss Before Income Tax Expense

(7,205

)

(209

)

(22,227

)

(1,711

)

Income tax expense

4

9

Net Loss

$

(7,205

)

$

(213

)

$

(22,227

)

$

(1,720

)

Net loss per share, basic and diluted

$

(0.06

)

$

0.00

$

(0.21

)

$

(0.03

)

Weighted-average shares used in computing net loss per share, basic and diluted

113,670,060

58,621,041

107,279,227

58,621,041

CarLotz, Inc. and Subsidiaries — Condensed Consolidated Statements of Cash Flows

(unaudited)

(In thousands, except per share and share data)

Six Months Ended June 30,

2021

2020

Cash Flow from Operating Activities

Net loss

$

(22,227

)

(1,720

)

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation – property and equipment

448

101

Amortization and accretion - marketable securities

788

Depreciation – lease vehicles

30

90

Loss on marketable securities

(3

)

Provision for doubtful accounts

6

Stock-based compensation expense

45,667

37

Change in fair value of Merger warrants liability

(12,683

)

Change in fair value of historic warrants liability

(31

)

Change in fair value of earnout shares

(44,056

)

Change in fair value of debt issuance costs and stock warrant

12

Change in fair value of redeemable convertible preferred stock tranche obligation

(629

)

Change in Operating Assets and Liabilities:

Accounts receivable

(1,279

)

(336

)

Inventories

(36,117

)

5,064

Other current assets

(5,466

)

(39

)

Other assets

(4,091

)

5

Accounts payable

2,499

719

Accrued expenses

6,187

1,048

Accrued expenses – related party

(229

)

13

Other current liabilities

447

117

Other liabilities

(582

)

248

Net Cash (Used in)/Provided by Operating Activities

(70,664

)

4,702

Cash Flows from Investing Activities

Purchase of property and equipment

(3,548

)

(14

)

Capitalized website and internal-use software costs

(6,601

)

Purchase of marketable securities

(307,560

)

(711

)

Proceeds from sales of marketable securities

128,954

21

Purchase of lease vehicles

(344

)

(87

)

Net Cash Used in Investing Activities

(189,099

)

(791

)

Cash Flows from Financing Activities

Payments made on long-term debt

(18

)

(5

)

Advance from holder of marketable securities

4,722

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

)

Borrowings on long-term debt

2,249

Payments on floor plan notes payable

(29,056

)

(13,394

)

Borrowings on floor plan notes payable

52,444

8,598

Net Cash Provided by/( Used in) Financing Activities

340,752

(2,552

)

Net Change in Cash and Cash Equivalents Including Restricted Cash

80,989

1,359

Cash and cash equivalents and restricted cash, beginning

2,813

4,102

Cash and cash equivalents and restricted cash, ending

$

83,802

$

5,461

Supplemental Disclosure of Cash Flow Information

Cash paid for interest

$

490

$

307

Supplementary Schedule of Non-cash Investing and Financing Activities:

Transfer from lease vehicles to inventory

$

150

$

199

Redeemable convertible preferred stock distributions accrued

923

Issuance of common stock warrants

15

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 accrued

(3,488

)

Purchases of property under capital lease obligation

(6,504

)

CarLotz, Inc. and Subsidiaries — Results of Operations, Retail Gross Profit per Unit

(unaudited)

(In thousands, except share data)

Three Months Ended June 30,

2021

2020

Change

Change

Revenue:

Retail vehicle sales

$

44,230

$

23,652

$

20,578

87

%

Wholesale vehicle sales

4,660

1,725

2,935

170

%

Finance and insurance, net

1,780

895

885

99

%

Lease income, net

98

127

(29

)

(23

)

%

Total revenues

50,768

26,399

24,369

92

%

Cost of sales:

Retail vehicle cost of sales

$

41,641

$

21,991

$

29,362

89

%

Wholesale vehicle cost of sales

4,945

1,679

2,324

195

%

Total cost of sales

$

46,586

$

23,670

$

22,916

97

%

Gross profit:

Retail vehicle gross profit

$

2,589

$

1,661

$

928

56

%

Wholesale vehicle gross profit

(285

)

46

(331

)

720

%

Finance and insurance gross profit

1,780

895

885

99

%

Lease income, net

98

127

(29

)

(23

)

%

Total gross profit

$

4,182

$

2,729

$

1,453

53

%

Retail gross profit per unit(1):

Retail vehicles gross profit

$

2,589

$

1,661

$

928

55.9

%

Finance and insurance gross profit

1,780

895

885

98.9

%

Total retail vehicles and finance and insurance gross profit

4,369

2,556

1,813

70.9

%

Retail vehicles unit sales

2,009

1,376

633

46.0

%

Retail vehicles gross profit per unit

$

2,175

$

1,858

$

317

17.1

%

(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 — Results of Operations, Retail Gross Profit per Unit

(unaudited)

(In thousands, except share data)

Six Months Ended June 30,

2021

2020

Change

Change

Revenue:

Retail vehicle sales

$

94,613

$

44,694

$

49,919

112

%

Wholesale vehicle sales

9,228

5,036

4,192

83

%

Finance and insurance, net

3,334

1,787

1,547

87

%

Lease income, net

205

272

(67

)

(25

)

%

Total revenues

107,380

51,789

55,591

107

%

Cost of sales:

Retail vehicle cost of sales

$

90,558

$

41,546

$

49,012

118

%

Wholesale vehicle cost of sales

10,632

5,042

5,590

111

%

Total cost of sales

$

101,190

$

46,588

$

54,602

117

%

Gross profit:

Retail vehicle gross profit

$

4,055

$

3,148

$

907

29

%

Wholesale vehicle gross profit

(1,404

)

(6

)

(1,398

)

23,300

%

Finance and insurance gross profit

3,334

1,787

1,547

87

%

Lease income, net

205

272

(67

)

(25

)

%

Total gross profit

$

6,190

$

5,201

$

989

19

%

Retail gross profit per unit(1):

Retail vehicles gross profit

$

4,055

$

3,148

$

907

29

%

Finance and insurance gross profit

3,334

1,787

1,547

87

%

Total retail vehicles and finance and insurance gross profit

7,389

4,935

2,454

50

%

Retail vehicles unit sales

4,563

2,829

1,734

61

%

Retail vehicles gross profit per unit

$

1,619

$

1,744

$

(125

)

(7

)

%

(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 June 30,

Six Months Ended June 30,

2021

2020

Change

2021

2020

Change

Net Loss

$

(7,205

)

$

(213

)

$

(6,992

)

$

(22,227

)

$

(1,720

)

$

(20,507

)

Adjusted to exclude the following:

Interest expense

184

107

77

359

256

103

Income tax expense

4

(4

)

9

(9

)

Depreciation and amortization expense

95

91

4

478

191

287

EBITDA

$

(6,926

)

$

(11

)

$

(6,915

)

$

(21,390

)

$

(1,264

)

$

(20,126

)

Other expense

553

(61

)

614

391

(64

)

455

Stock compensation expense

3,704

3

3,701

45,667

37

45,630

Management fee expense - related party

70

(70

)

2

132

(130

)

Change in fair value of warrants liability

(325

)

(325

)

(12,683

)

(12,683

)

Change in fair value of redeemable convertible preferred stock tranche obligation

(345

)

345

(629

)

629

Change in fair value of earnout provision

(12,210

)

(12,210

)

(44,056

)

(44,056

)

Adjusted EBITDA

$

(15,204

)

$

(344

)

$

(14,860

)

$

(32,069

)

$

(1,788

)

$

(30,281

)