CarLotz Announces Second Quarter 2021 Financial Results

August 9, 2021

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 cash226  605 
Marketable securities – at fair value175,424  1,032 
Accounts receivable, net5,411  4,132 
Inventories47,469  11,202 
Other current assets6,253  6,679 
Total Current Assets318,359  25,858 
Marketable securities – at fair value3,481   
Property and equipment, net11,662  1,868 
Capitalized software9,898   
Lease vehicles, net337  173 
Other assets4,390  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 payable29,427  6,039 
Accounts payable8,782  6,283 
Accrued transaction expenses  6,052 
Accrued expenses13,238  3,563 
Accrued expenses – related party  5,082 
Other current liabilities5,425  256 
Total Current Liabilities57,084  33,645 
Long-term debt, less current portion7,579  2,999 
Redeemable convertible preferred stock tranche obligation  2,832 
Earnout provision30,228   
Merger warrant liability26,341   
Other liabilities1,232  1,959 
Total Liabilities122,464  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, 202011  6 
Additional paid-in capital281,976  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  $44,694 
Wholesale vehicle sales4,660  1,725  9,228  5,036 
Finance and insurance, net1,780  895  3,334  1,787 
Lease income, net98  127  205  272 
Total Revenues50,768  26,399  107,380  51,789 
Cost of sales (exclusive of depreciation)46,586  23,670  101,190  46,588 
Gross Profit4,182  2,729  6,190  5,201 
Operating Expenses:   
Selling, general and administrative19,386  3,073  38,259  6,989 
Stock-based compensation expense3,704  3  45,667  37 
Depreciation and amortization expense95  91  478  191 
Management fee expense – related party  70  2  132 
Total Operating Expenses23,185  3,237  84,406  7,349 
Loss from Operations(19,003) (508) (78,216) (2,148)
Interest Expense184  107  359  256 
Other Income (Expense), net      
Change in fair value of merger warrants liability325    12,683   
Change in fair value of redeemable convertible preferred stock tranche obligation  345    629 
Change in fair value of earnout provision12,210    44,056   
Other income (expense)(553) 61  (391) 64 
Total Other Income (Expense), net11,982  406  56,348  693 
Loss Before Income Tax Expense(7,205) (209) (22,227) (1,711)
Income tax expense  4    9 
Net Loss$(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 diluted113,670,060  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 equipment448  101 
Amortization and accretion - marketable securities788   
Depreciation – lease vehicles30  90 
Loss on marketable securities  (3)
Provision for doubtful accounts  6 
Stock-based compensation expense45,667  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 payable2,499  719 
Accrued expenses6,187  1,048 
Accrued expenses – related party(229) 13 
Other current liabilities447  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 securities128,954  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 securities4,722   
PIPE Issuance125,000   
Merger financing309,999   
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 payable52,444  8,598 
Net Cash Provided by/( Used in) Financing Activities340,752  (2,552)
Net Change in Cash and Cash Equivalents Including Restricted Cash80,989  1,359 
Cash and cash equivalents and restricted cash, beginning2,813  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 sales4,660  1,725  2,935  170 %
Finance and insurance, net1,780  895  885  99 %
Lease income, net98  127  (29) (23)%
Total revenues50,768  26,399  24,369  92 %
Cost of sales:     
Retail vehicle cost of sales$41,641  $21,991  $29,362  89 %
Wholesale vehicle cost of sales4,945  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 profit1,780  895  885  99 %
Lease income, net98  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 profit1,780  895  885  98.9 %
Total retail vehicles and finance and insurance gross profit4,369  2,556  1,813  70.9 %
        
Retail vehicles unit sales2,009  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 sales9,228  5,036  4,192  83 %
Finance and insurance, net3,334  1,787  1,547  87 %
Lease income, net205  272  (67) (25)%
Total revenues107,380  51,789  55,591  107 %
Cost of sales:     
Retail vehicle cost of sales$90,558  $41,546  $49,012  118 %
Wholesale vehicle cost of sales10,632  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 profit3,334  1,787  1,547  87 %
Lease income, net205  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 profit3,334  1,787  1,547  87 %
Total retail vehicles and finance and insurance gross profit7,389  4,935  2,454  50 %
        
Retail vehicles unit sales4,563  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) $(20,507)
Adjusted to exclude the following:           
Interest expense184  107  77  359  256  103 
Income tax expense  4  (4)   9  (9)
Depreciation and amortization expense95  91  4  478  191  287 
EBITDA$(6,926) $(11) $(6,915) $(21,390) $(1,264) $(20,126)
Other expense553  (61) 614  391  (64) 455 
Stock compensation expense3,704  3  3,701  45,667  37  45,630 
Management fee expense - related party  70  (70) 2  132  (130)
Change in fair value of warrants liability(325)   (325) (12,683)   (12,683)
Change in fair value of redeemable convertible preferred stock tranche obligation  (345) 345    (629) 629 
Change in fair value of earnout provision(12,210)   (12,210) (44,056)   (44,056)
Adjusted EBITDA$(15,204) $(344) $(14,860) $(32,069) $(1,788) $(30,281)
                        

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