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Vroom Announces First Quarter 2023 Results

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May 9, 2023

Continued Progress on Long-Term Roadmap Driving GPPU Improvement and Cost Reductions

NEW YORK--(BUSINESS WIRE)--May 9, 2023-- Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the first quarter ended March 31, 2023.

HIGHLIGHTS OF FIRST QUARTER 2023 VERSUS FOURTH QUARTER 2022

  • Ecommerce gross profit per unit of $2,552 as compared to $1,233
  • Net loss of ($75.0) million as compared to net income of $24.8 million, due to gain on debt extinguishment of $126.8 million in the fourth quarter of 2022
  • Adjusted EBITDA of $(64.8) million as compared to $(74.8)1 million
  • Adjusted EBITDA excluding securitization gain and non-recurring costs of $(64.1) million as compared to $(74.4)1 million
  • Adjusted EBITDA includes approximately $5.0 million negative impact of up-front expenses related to 2023-1 securitization
  • Reduced sequential cost per unit in 4 out of 5 SG&A financial levers outlined in our Long-Term Roadmap
  • Completed reductions in force in January and April resulting in approximately $42.0 million of anticipated annualized cost savings

Tom Shortt, Chief Executive Officer of Vroom, said, “In the first quarter of 2023, consistent with our Long-Term Roadmap, we continued to make progress on our three key objectives and four strategic initiatives, improving adjusted EBITDA by $10.0 million1 sequentially. Ecommerce gross profit per unit (GPPU) increased from $1,233 in Q4 2022 to $2,552 in Q1 2023, benefiting from GPPU on unaged units, which approximated our Q3 2022 GPPU, as well as electric vehicle inventory reserves taken in Q4 2022. During the first quarter of 2023, 77% of our units sold were aged units, or units held greater than 180 days. We continued to drive process improvements across titling and registration, pricing, marketing, sales, reconditioning and logistics, and also began to ramp up marketing and unit acquisitions in order to position the Company for growth going forward.”

Bob Krakowiak, Vroom’s Chief Financial Officer, commented, “We succeeded in reducing per-unit costs across 1) logistics, 2) sales, 3) titling, registration and support, and 4) fixed costs. We completed reductions in force in January and April 2023 which we expect to generate annualized cost savings of approximately $42 million. We further strengthened our balance sheet by repurchasing $15 million of our convertible notes and enhanced our liquidity by executing the 2023-1 securitization at UACC. During 2023, we will continue to pursue opportunities to reduce costs, strengthen our balance sheet and enhance our liquidity.”

1 We have recast Adjusted EBITDA for the three months ended December 31, 2022 to conform to current period presentation. See "Non-GAAP Financial Measures" below.

FIRST QUARTER 2023 FINANCIAL DISCUSSION

All financial comparisons for the first quarter are on a year-over-year basis unless otherwise noted.

Ecommerce Results

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

 

Change

 

 

% Change

 

 

 

(in thousands, except unit
data and average days to sale)

 

 

 

 

 

 

 

 

Ecommerce units sold

 

 

 

3,933

 

 

 

 

19,473

 

 

 

 

(15,540

)

 

 

(79.8

)%

Ecommerce revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle revenue

 

$

 

124,107

 

 

$

 

652,625

 

 

$

 

(528,518

)

 

 

(81.0

)%

Product revenue

 

 

 

11,526

 

 

 

 

22,739

 

 

 

 

(11,213

)

 

 

(49.3

)%

Total ecommerce revenue

 

$

 

135,633

 

 

$

 

675,364

 

 

$

 

(539,731

)

 

 

(79.9

)%

Ecommerce gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross (loss) profit

 

$

 

(594

)

 

$

 

11,581

 

 

$

 

(12,175

)

 

 

(105.1

)%

Product gross profit

 

 

 

10,629

 

 

 

 

22,739

 

 

 

 

(12,110

)

 

 

(53.3

)%

Total ecommerce gross profit

 

$

 

10,035

 

 

$

 

34,320

 

 

$

 

(24,285

)

 

 

(70.8

)%

Average vehicle selling price per ecommerce unit

 

$

 

31,555

 

 

$

 

33,514

 

 

$

 

(1,959

)

 

 

(5.8

)%

Product revenue per ecommerce unit

 

 

 

2,931

 

 

 

 

1,168

 

 

 

 

1,763

 

 

 

150.9

%

Gross profit per ecommerce unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross (loss) profit per ecommerce unit

 

$

 

(151

)

 

$

 

595

 

 

$

 

(746

)

 

 

(125.4

)%

Product gross profit per ecommerce unit

 

 

 

2,703

 

 

 

 

1,168

 

 

 

 

1,535

 

 

 

131.4

%

Total gross profit per ecommerce unit

 

$

 

2,552

 

 

$

 

1,763

 

 

$

 

789

 

 

 

44.8

%

Ecommerce average days to sale

 

 

 

279

 

 

 

 

91

 

 

 

 

188

 

 

 

206.5

%

Results by Segment

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

 

 

 

2023

 

 

2022(1)

 

 

Change

 

 

% Change

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Units:

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

 

3,933

 

 

 

19,473

 

 

 

(15,540

)

 

 

(79.8

)%

Wholesale

 

 

1,169

 

 

 

10,113

 

 

 

(8,944

)

 

 

(88.4

)%

All Other (2)

 

 

356

 

 

 

1,699

 

 

 

(1,343

)

 

 

(79.0

)%

Total units

 

 

5,458

 

 

 

31,285

 

 

 

(25,827

)

 

 

(82.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

135,633

 

 

$

675,364

 

 

$

(539,731

)

 

 

(79.9

)%

Wholesale

 

 

13,895

 

 

 

139,984

 

 

 

(126,089

)

 

 

(90.1

)%

Retail Financing (3)

 

 

31,988

 

 

 

47,687

 

 

 

(15,699

)

 

 

(32.9

)%

All Other (4)

 

 

14,951

 

 

 

60,740

 

 

 

(45,789

)

 

 

(75.4

)%

Total revenue

 

$

196,467

 

 

$

923,775

 

 

$

(727,308

)

 

 

(78.7

)%

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

10,035

 

 

$

34,320

 

 

$

(24,285

)

 

 

(70.8

)%

Wholesale

 

 

62

 

 

 

(2,753

)

 

 

2,815

 

 

 

102.3

%

Retail Financing (3)

 

 

25,774

 

 

 

44,963

 

 

 

(19,189

)

 

 

(42.7

)%

All Other (4)

 

 

2,934

 

 

 

5,110

 

 

 

(2,176

)

 

 

(42.6

)%

Total gross profit

 

$

38,805

 

 

$

81,640

 

 

$

(42,835

)

 

 

(52.5

)%

Gross profit (loss) per unit (5):

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

2,552

 

 

$

1,763

 

 

$

789

 

 

 

44.8

%

Wholesale

 

$

53

 

 

$

(272

)

 

$

325

 

 

 

119.5

%

(1)

In the second quarter of 2022, we reevaluated our reporting segments based on relative revenue and gross profit and significance in our long term strategy. As a result of that analysis, we determined to no longer report TDA as a separate operating segment. As of June 30, 2022, we are organized into three reportable segments: Ecommerce, Wholesale, and Retail Financing. We reclassified TDA revenue and TDA gross profit from the TDA reportable segment to the “All Other” category to conform to current year presentation.

(2)

All Other units consist of retail sales of used vehicles from TDA.

(3)

The Retail Financing segment represents UACC’s operations with its network of third-party dealership customers as of the closing of the UACC acquisition in February 2022.

(4)

All Other revenues and gross profit consist of retail sales of used vehicles from TDA and fees earned on sales of value-added products associated with those vehicles sales and the CarStory business.

(5)

Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit.

SG&A

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

% Change

 

 

 

(in thousands)

 

 

 

 

 

 

 

Compensation & benefits

 

$

 

50,666

 

 

$

 

74,525

 

 

$

(23,859

)

 

 

(32.0

)%

Marketing expense

 

 

 

11,471

 

 

 

 

33,735

 

 

 

(22,264

)

 

 

(66.0

)%

Outbound logistics

 

 

 

2,072

 

 

 

 

26,748

 

 

 

(24,676

)

 

 

(92.3

)%

Occupancy and related costs

 

 

 

4,741

 

 

 

 

5,646

 

 

 

(905

)

 

 

(16.0

)%

Professional fees

 

 

 

6,592

 

 

 

 

13,299

 

 

 

(6,707

)

 

 

(50.4

)%

Software and IT costs

 

 

 

9,340

 

 

 

 

10,823

 

 

 

(1,483

)

 

 

(13.7

)%

Other

 

 

 

11,655

 

 

 

 

23,218

 

 

 

(11,563

)

 

 

(49.8

)%

Total selling, general & administrative expenses

 

$

 

96,537

 

 

$

 

187,994

 

 

$

(91,457

)

 

 

(48.6

)%

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance:

  • EBITDA;
  • Adjusted EBITDA;
  • Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues;
  • Adjusted EBITDA excluding securitization gain;
  • Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues;

These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with other operating and financial performance measures presented in accordance with U.S. GAAP. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with U.S. GAAP. We have reconciled all non-GAAP financial measures with the most directly comparable U.S. GAAP financial measures.

EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because each of these non-GAAP financial measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

EBITDA

We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense.

Adjusted EBITDA

We calculate Adjusted EBITDA as EBITDA adjusted to exclude severance costs, gain on debt extinguishment, goodwill impairment charge, and acquisition related costs. Changes in fair value of financial instruments can fluctuate significantly from period to period and previously related primarily to historical loans and debt which have been securitized, and acquired on February 1, 2022 from UACC. Our ongoing business model is to originate or purchase finance receivables with the intent to sell which we recognize at the lower of cost or fair value. As a result of current market conditions, the financial instruments related to the 2022-2 and 2023-1 securitization transactions are recognized on balance-sheet and accounted for under the fair value option. See Note 16 — Financial Instruments and Fair Value Measurements to our condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2023. As a result, the majority of our finance receivables are now carried at fair value and a significant portion of the risk of loss associated with these finance receivables have been retained by UACC. We therefore have determined we will no longer make any adjustments for such fluctuations in fair value to our Adjusted EBITDA results. We have recast the prior period presented to conform to current period presentation. We may account for future securitizations as on balance sheet transactions depending on the market conditions.

Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

We calculate Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the non-recurring costs incurred to address operational and customer experience issues, including rental cars for our customers and legal settlements with customers and state DMVs. While we expect to continue to incur these costs over the next few quarterly periods, we do not expect these costs to continue to be incurred once our operational issues have been resolved.

Adjusted EBITDA excluding securitization gain

We calculate Adjusted EBITDA excluding securitization gain as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC's finance receivables, and believe that it provides a useful perspective on the underlying operating results and trends and a means to compare our period-over-period results.

Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

We calculate Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables and the non-recurring costs incurred to address operational and customer experience issues.

The following table presents a reconciliation of the foregoing non-GAAP financial measures to net loss, which is the most directly comparable U.S. GAAP measure:

 

 

Three Months Ended
March 31,

 

 

 

2023

 

 

2022

 

 

 

(in thousands)

 

Net loss

 

$

(75,044

)

 

$

(310,459

)

Adjusted to exclude the following:

 

 

 

 

 

 

Interest expense

 

 

9,919

 

 

 

9,380

 

Interest income

 

 

(5,942

)

 

 

(3,952

)

Provision (benefit) for income taxes

 

 

273

 

 

 

(23,240

)

Depreciation and amortization

 

 

10,637

 

 

 

7,895

 

EBITDA

 

$

(60,157

)

 

$

(320,376

)

Severance costs

 

$

4,104

 

 

$

—

 

Gain on debt extinguishment

 

 

(8,709

)

 

 

—

 

Goodwill impairment charge

 

 

—

 

 

 

201,703

 

Acquisition related costs

 

 

—

 

 

 

5,653

 

Adjusted EBITDA

 

$

(64,762

)

 

$

(113,020

)

Non-recurring costs to address operational and customer experience issues

 

 

659

 

 

 

1,000

 

Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

 

$

(64,103

)

 

$

(112,020

)

Securitization gain

 

 

—

 

 

 

(29,617

)

Adjusted EBITDA excluding securitization gain

 

$

(64,762

)

 

$

(142,637

)

Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

 

$

(64,103

)

 

$

(141,637

)

FIRST QUARTER 2023 AS COMPARED TO FOURTH QUARTER 2022

 

 

Three Months Ended
March 31,

 

 

Three Months Ended
December 31,

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

% Change

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Total revenues

 

$

196,467

 

 

$

209,349

 

 

$

(12,882

)

 

 

(6.2

)%

Total gross profit

 

$

38,805

 

 

$

29,459

 

 

$

9,346

 

 

 

31.7

%

Ecommerce units sold

 

 

3,933

 

 

 

4,144

 

 

 

(211

)

 

 

(5.1

)%

Ecommerce revenue

 

$

135,633

 

 

$

141,758

 

 

$

(6,125

)

 

 

(4.3

)%

Ecommerce gross profit

 

$

10,035

 

 

$

5,110

 

 

$

4,925

 

 

 

96.4

%

Vehicle gross loss per ecommerce unit

 

$

(151

)

 

$

(1,346

)

 

$

1,195

 

 

 

88.8

%

Product gross profit per ecommerce unit

 

 

2,703

 

 

 

2,579

 

 

 

124

 

 

 

4.8

%

Total gross profit per ecommerce unit

 

$

2,552

 

 

$

1,233

 

 

$

1,319

 

 

 

107.0

%

Wholesale units sold

 

 

1,169

 

 

 

1,768

 

 

 

(599

)

 

 

(33.9

)%

Wholesale revenue

 

$

13,895

 

 

$

23,039

 

 

$

(9,144

)

 

 

(39.7

)%

Wholesale gross profit (loss)

 

$

62

 

 

$

(4,359

)

 

$

4,421

 

 

 

101.4

%

Wholesale gross profit (loss) per unit

 

$

53

 

 

$

(2,465

)

 

$

2,518

 

 

 

102.2

%

Retail Financing revenue

 

$

31,988

 

 

$

32,537

 

 

$

(549

)

 

 

(1.7

)%

Retail Financing gross profit

 

$

25,774

 

 

$

28,744

 

 

$

(2,970

)

 

 

(10.3

)%

Total selling, general, and administrative expenses

 

$

96,537

 

 

$

90,760

 

 

$

5,777

 

 

 

6.4

%

 

 

Three Months Ended
March 31,

 

 

Three Months Ended
December 31,

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

% Change

 

 

 

(in thousands)

 

 

 

 

Net (loss) income

 

$

(75,044

)

 

$

24,765

 

 

$

(99,809

)

 

 

(403.0

)%

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

9,919

 

 

 

12,076

 

 

 

(2,157

)

 

 

(17.9

)%

Interest income

 

 

(5,942

)

 

 

(6,372

)

 

 

430

 

 

 

6.7

%

Provision for income taxes

 

 

273

 

 

 

2,405

 

 

 

(2,132

)

 

 

(88.6

)%

Depreciation and amortization

 

 

10,637

 

 

 

10,702

 

 

 

(65

)

 

 

(0.6

)%

EBITDA

 

$

(60,157

)

 

$

43,576

 

 

$

(103,733

)

 

 

(238.1

)%

Severance costs

 

$

4,104

 

 

$

—

 

 

$

4,104

 

 

 

100.0

%

Gain on debt extinguishment

 

 

(8,709

)

 

 

(126,767

)

 

 

118,058

 

 

 

93.1

%

Realignment costs

 

 

—

 

 

 

2,253

 

 

 

(2,253

)

 

 

(100.0

)%

Acceleration of non-cash stock-based compensation

 

 

—

 

 

 

2,439

 

 

 

(2,439

)

 

 

(100.0

)%

Other

 

 

—

 

 

 

3,679

 

 

 

(3,679

)

 

 

(100.0

)%

Adjusted EBITDA

 

$

(64,762

)

 

$

(74,820

)

 

$

10,058

 

 

 

13.4

%

Non-recurring costs to address operational and customer experience issues

 

 

659

 

 

 

374

 

 

 

285

 

 

 

76.2

%

Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

 

$

(64,103

)

 

$

(74,446

)

 

$

10,343

 

 

 

(13.9

)%

Securitization gain

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.0

%

Adjusted EBITDA excluding securitization gain

 

$

(64,762

)

 

$

(74,820

)

 

$

10,058

 

 

 

13.4

%

Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

 

$

(64,103

)

 

$

(74,446

)

 

$

10,343

 

 

 

13.9

%

Conference Call & Webcast Information

Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Wednesday, May 10, 2023 at 8:30 a.m. ET.

To access the conference call, please register at this embedded link. Registered participants will be sent a unique PIN to access the call. A listen-only webcast will also be available via the same link and at ir.vroom.com. An archived webcast of the conference call will be accessible on the website within 48 hours of its completion.

About Vroom (Nasdaq: VRM)

Vroom is an innovative, end-to-end ecommerce platform that offers a better way to buy and a better way to sell used vehicles. The Company’s scalable, data-driven technology brings all phases of the vehicle buying and selling process to consumers wherever they are and offers an extensive selection of vehicles, transparent pricing, competitive financing, and contact-free, at-home pick-up and delivery. For more information visit www.vroom.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding expected timelines with respect to, our execution of and the expected benefits from our long term roadmap and cost-saving initiatives, including our reductions in force; our future results of operations and financial position, including our ability to improve our unit economics and future growth, including with respect to our liquidity and our plans to enhance liquidity and strengthen our balance sheet. These statements are based on management’s current assumptions and are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, as updated by our Quarterly report on Form 10-Q for the quarter ended March 31, 2023, which is available on our Investor Relations website at ir.vroom.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

 

VROOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

As of
March 31,

 

 

As of
December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

316,714

 

 

$

398,915

 

Restricted cash (including restricted cash of consolidated VIEs of $48.0 million and $24.7 million, respectively)

 

 

71,994

 

 

 

73,095

 

Accounts receivable, net of allowance of $10.0 million and $21.5 million, respectively

 

 

10,077

 

 

 

13,967

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $12.1 million and $11.5 million, respectively)

 

 

13,091

 

 

 

12,939

 

Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $163.7 million and $305.9 million, respectively)

 

 

186,777

 

 

 

321,626

 

Inventory

 

 

212,982

 

 

 

320,648

 

Beneficial interests in securitizations

 

 

7,976

 

 

 

20,592

 

Prepaid expenses and other current assets

 

 

59,357

 

 

 

58,327

 

Total current assets

 

 

878,968

 

 

 

1,220,109

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $508.3 million and $119.6 million, respectively)

 

 

523,179

 

 

 

140,235

 

Property and equipment, net

 

 

51,427

 

 

 

50,201

 

Intangible assets, net

 

 

152,155

 

 

 

158,910

 

Operating lease right-of-use assets

 

 

21,741

 

 

 

23,568

 

Other assets

 

 

24,166

 

 

 

26,004

 

Total assets

 

$

1,651,636

 

 

$

1,619,027

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

28,861

 

 

$

34,702

 

Accrued expenses

 

 

58,492

 

 

 

76,795

 

Vehicle floorplan

 

 

147,428

 

 

 

276,988

 

Warehouse credit facilities of consolidated VIEs

 

 

124,247

 

 

 

229,518

 

Current portion of securitization debt of consolidated VIEs at fair value

 

 

261,746

 

 

 

47,239

 

Deferred revenue

 

 

13,037

 

 

 

10,655

 

Operating lease liabilities, current

 

 

9,021

 

 

 

9,730

 

Other current liabilities

 

 

15,251

 

 

 

17,693

 

Total current liabilities

 

 

658,083

 

 

 

703,320

 

Long term debt, net of current portion (including securitization debt of consolidated VIEs of $199.2 million and $32.6 million at fair value, respectively)

 

 

554,655

 

 

 

402,154

 

Operating lease liabilities, excluding current portion

 

 

18,278

 

 

 

20,129

 

Other long-term liabilities

 

 

18,382

 

 

 

18,183

 

Total liabilities

 

 

1,249,398

 

 

 

1,143,786

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 138,802,011 and 138,201,903 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

 

 

135

 

 

 

135

 

Additional paid-in-capital

 

 

2,077,839

 

 

 

2,075,798

 

Accumulated deficit

 

 

(1,675,736

)

 

 

(1,600,692

)

Total stockholders’ equity

 

 

402,238

 

 

 

475,241

 

Total liabilities and stockholders’ equity

 

$

1,651,636

 

 

$

1,619,027

 

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2023

 

 

2022

 

Revenue:

 

 

 

 

 

 

Retail vehicle, net

 

$

135,270

 

 

$

707,186

 

Wholesale vehicle

 

 

13,895

 

 

 

139,984

 

Product, net

 

 

11,500

 

 

 

24,449

 

Finance

 

 

31,988

 

 

 

47,687

 

Other

 

 

3,814

 

 

 

4,469

 

Total revenue

 

 

196,467

 

 

 

923,775

 

Cost of sales:

 

 

 

 

 

 

Retail vehicle

 

 

135,724

 

 

 

695,509

 

Wholesale vehicle

 

 

13,833

 

 

 

142,737

 

Product

 

 

897

 

 

 

—

 

Finance

 

 

6,214

 

 

 

2,724

 

Other

 

 

994

 

 

 

1,165

 

Total cost of sales

 

 

157,662

 

 

 

842,135

 

Total gross profit

 

 

38,805

 

 

 

81,640

 

Selling, general and administrative expenses

 

 

96,537

 

 

 

187,994

 

Depreciation and amortization

 

 

10,531

 

 

 

7,856

 

Impairment charges

 

 

—

 

 

 

201,703

 

Loss from operations

 

 

(68,263

)

 

 

(315,913

)

Gain on debt extinguishment

 

 

(8,709

)

 

 

—

 

Interest expense

 

 

9,919

 

 

 

9,380

 

Interest income

 

 

(5,942

)

 

 

(3,952

)

Other loss, net

 

 

11,240

 

 

 

12,358

 

Income (loss) before provision for income taxes

 

 

(74,771

)

 

 

(333,699

)

Provision (benefit) for income taxes

 

 

273

 

 

 

(23,240

)

Net loss

 

$

(75,044

)

 

$

(310,459

)

Net loss per share attributable to common stockholders, basic

 

$

(0.54

)

 

$

(2.26

)

Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic

 

 

138,530,884

 

 

 

137,259,629

 

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2023

 

 

2022

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(75,044

)

 

$

(310,459

)

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

 

 

 

 

 

 

Impairment charges

 

 

—

 

 

 

201,703

 

Gain on debt extinguishment

 

 

(8,709

)

 

 

—

 

Depreciation and amortization

 

 

10,637

 

 

 

7,895

 

Amortization of debt issuance costs

 

 

1,115

 

 

 

1,254

 

Realized gains on securitization transactions

 

 

—

 

 

 

(29,617

)

Deferred taxes

 

 

—

 

 

 

(23,855

)

Losses on finance receivables and securitization debt, net

 

 

16,603

 

 

 

15,725

 

Stock-based compensation expense

 

 

2,041

 

 

 

3,629

 

Provision to record inventory at lower of cost or net realizable value

 

 

(7,315

)

 

 

469

 

Provision for bad debt

 

 

(422

)

 

 

5,853

 

Provision to record finance receivables held for sale at lower of cost or fair value

 

 

(1,251

)

 

 

158

 

Amortization of unearned discounts on finance receivables at fair value

 

 

(5,320

)

 

 

(3,942

)

Other, net

 

 

(5,067

)

 

 

(274

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Finance receivables, held for sale

 

 

 

 

 

 

Originations of finance receivables held for sale

 

 

(143,174

)

 

 

(118,861

)

Principal payments received on finance receivables held for sale

 

 

20,731

 

 

 

2,659

 

Proceeds from sale of finance receivables held for sale, net

 

 

—

 

 

 

272,309

 

Other

 

 

1,850

 

 

 

(1,705

)

Accounts receivable

 

 

4,312

 

 

 

(4,331

)

Inventory

 

 

114,981

 

 

 

(15,453

)

Prepaid expenses and other current assets

 

 

13,006

 

 

 

6,928

 

Other assets

 

 

1,838

 

 

 

(2,763

)

Accounts payable

 

 

(5,841

)

 

 

(6,824

)

Accrued expenses

 

 

(18,915

)

 

 

8,036

 

Deferred revenue

 

 

2,382

 

 

 

(2,449

)

Other liabilities

 

 

(3,459

)

 

 

(21,163

)

Net cash used in operating activities

 

 

(85,021

)

 

 

(15,078

)

Investing activities

 

 

 

 

 

 

Finance receivables at fair value

 

 

 

 

 

 

Purchases of finance receivables at fair value

 

 

(3,392

)

 

 

—

 

Principal payments received on finance receivables at fair value

 

 

41,850

 

 

 

33,570

 

Proceeds from sale of finance receivables at fair value, net

 

 

—

 

 

 

29,043

 

Consolidation of VIEs

 

 

11,409

 

 

 

—

 

Principal payments received on beneficial interests

 

 

2,144

 

 

 

714

 

Purchase of property and equipment

 

 

(5,193

)

 

 

(7,096

)

Acquisition of business, net of cash acquired of $47.9 million

 

 

—

 

 

 

(268,194

)

Net cash provided by (used in) investing activities

 

 

46,818

 

 

 

(211,963

)

Financing activities

 

 

 

 

 

 

Proceeds from borrowings under secured financing agreements

 

 

238,735

 

 

 

—

 

Principal repayment under secured financing agreements

 

 

(42,784

)

 

 

(68,402

)

Proceeds from vehicle floorplan

 

 

41,180

 

 

 

801,971

 

Repayments of vehicle floorplan

 

 

(170,740

)

 

 

(744,831

)

Proceeds from warehouse credit facilities

 

 

135,900

 

 

 

49,000

 

Repayments of warehouse credit facilities

 

 

(241,351

)

 

 

(227,067

)

Repurchases of convertible senior notes

 

 

(5,883

)

 

 

—

 

Other financing activities

 

 

(156

)

 

 

(875

)

Net cash used in financing activities

 

 

(45,099

)

 

 

(190,204

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(83,302

)

 

 

(417,245

)

Cash, cash equivalents and restricted cash at the beginning of period

 

 

472,010

 

 

 

1,214,775

 

Cash, cash equivalents and restricted cash at the end of period

 

$

388,708

 

 

$

797,530

 

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

(unaudited)

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

12,335

 

 

$

5,991

 

Cash paid for income taxes

 

$

1,189

 

 

$

40

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Finance receivables from consolidation of 2022-2 securitization transaction

 

$

180,706

 

 

$

—

 

Elimination of beneficial interest from the consolidation of 2022-2 securitization transaction

 

$

9,811

 

 

$

—

 

Securitization debt from consolidation of 2022-2 securitization transaction

 

$

186,386

 

 

$

—

 

Reclassification of finance receivables held for sale to finance receivables at fair value, net

 

$

248,081

 

 

$

—

 

Fair value of beneficial interests received in securitization transactions

 

$

—

 

 

$

16,473

 

 

Investor Relations:
Vroom
Jon Sandison
investors@vroom.com

Media Contact:
Vroom
Chris Hayes
chris.hayes@vroom.com

Source: Vroom, Inc.