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Vroom Announces Fourth Quarter and Full Year 2022 Results

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Feb 28, 2023

Significant Sequential Cost Reductions and Continued Progress on Long-Term Roadmap

NEW YORK--(BUSINESS WIRE)--Feb. 28, 2023-- Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the fourth quarter and fiscal year ended December 31, 2022.

HIGHLIGHTS OF FOURTH QUARTER 2022 VERSUS THIRD QUARTER 2022

  • Ecommerce gross profit per unit of $1,233 as compared to $4,206
  • SG&A expenses of $90.8 million as compared to $134.6 million
  • Net income of $24.8 million as compared to net loss of $(51.1) million
  • Adjusted EBITDA of $(70.9) million as compared to $(73.3) million
  • Adjusted EBITDA excluding securitization gain and non-recurring costs of $(70.5) million as compared to $(73.5) million

HIGHLIGHTS OF FISCAL YEAR 2022(1) VERSUS FISCAL YEAR 2021

  • Ecommerce gross profit per unit of $2,545 compared to $2,206
  • SG&A expenses of $566.4 million compared to $547.8 million
  • Net loss of $(451.9) million compared to $(370.9) million
  • Adjusted EBITDA of $(337.2) million compared to $(340.2) million
  • Adjusted EBITDA excluding securitization gain and non-recurring costs of $(357.4) million compared to $(340.2) million

(1) Fiscal year 2022 includes UACC's results of operations starting on February 1, 2022.

Tom Shortt, Chief Executive Officer of Vroom, said, “In the fourth quarter we continued to make progress on our three key objectives and four strategic initiatives. We significantly reduced operating expenses quarter over quarter and continued to improve our operations and customer experience. We improved our titling process enabling us to end the year with 87% of units available for sale or pending sale versus 52% at the end of Q3, however it also increased the age of our inventory available for sale and inventory sold.

Gross profit per unit declined from $4,206 in Q3 to $1,233 in Q4 primarily due to three items. The decline quarter over quarter was impacted primarily by three items. First, the percentage of sales from aged units increased 5X from Q3 to Q4; 36% of our units sold during the 4th quarter were aged units we’ve held >270 days. Second, increased industry wide market depreciation. Third, higher inventory reserves primarily driven by recent electric unit OEM price decreases.

During 2022 we strategically slowed down the business while we improved our customer experience and processes across titling and registration, pricing, marketing, reconditioning and logistics, and began to insource our sales function from our primary third-party resource. During 2023, we expect to resume growth, sell through aged vehicles, improve variable cost per unit and reduce fixed costs.”

Bob Krakowiak, Vroom’s Chief Financial Officer, commented, “During the fourth quarter we further maximized liquidity and strengthened our balance sheet by repurchasing $198 million of our convertible notes and unlocking $70 million of cash-in-inventory and restricted cash. Combined with earlier note repurchases, we repurchased $254 million of our convertible notes throughout 2022. During 2023, we will continue to pursue opportunities to enhance our liquidity.”

FOURTH QUARTER 2022 FINANCIAL DISCUSSION
All financial comparisons for the fourth quarter are on a year-over-year basis unless otherwise noted.

Ecommerce Results

 

Three Months Ended
December 31,

 

 

 

 

 

 

 

 

 

Year Ended
December 31,

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

 

 

Change

 

% Change

 

2022

 

 

2021

 

 

Change

 

% Change

 

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

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Ecommerce units sold

 

 

4,144

 

 

 

 

21,243

 

 

 

 

(17,099

)

 

 

(80.5

)%

 

 

 

39,278

 

 

 

 

74,698

 

 

 

 

(35,420

)

 

 

(47.4

)%

Ecommerce revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle revenue

$

 

131,069

 

 

$

 

715,874

 

 

$

 

(584,805

)

 

 

(81.7

)%

 

$

 

1,304,797

 

 

$

 

2,360,368

 

 

$

 

(1,055,571

)

 

 

(44.7

)%

Product revenue

 

 

10,689

 

 

 

 

22,846

 

 

 

 

(12,157

)

 

 

(53.2

)%

 

 

 

59,398

 

 

 

 

82,001

 

 

 

 

(22,603

)

 

 

(27.6

)%

Total ecommerce revenue

$

 

141,758

 

 

$

 

738,720

 

 

$

 

(596,962

)

 

 

(80.8

)%

 

$

 

1,364,195

 

 

$

 

2,442,369

 

 

$

 

(1,078,174

)

 

 

(44.1

)%

Ecommerce gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit

$

 

(5,579

)

 

$

 

10,042

 

 

$

 

(15,621

)

 

 

(155.6

)%

 

$

 

40,575

 

 

$

 

82,745

 

 

$

 

(42,170

)

 

 

(51.0

)%

Product gross profit

 

 

10,689

 

 

 

 

22,846

 

 

 

 

(12,157

)

 

 

(53.2

)%

 

 

 

59,398

 

 

 

 

82,001

 

 

 

 

(22,603

)

 

 

(27.6

)%

Total ecommerce gross profit

$

 

5,110

 

 

$

 

32,888

 

 

$

 

(27,778

)

 

 

(84.5

)%

 

$

 

99,973

 

 

$

 

164,746

 

 

$

 

(64,773

)

 

 

(39.3

)%

Average vehicle selling price per ecommerce unit

$

 

31,629

 

 

$

 

33,699

 

 

$

 

(2,070

)

 

 

(6.1

)%

 

$

 

33,220

 

 

$

 

31,599

 

 

$

 

1,621

 

 

 

5.1

%

Gross profit per ecommerce unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit per ecommerce unit

$

 

(1,346

)

 

$

 

473

 

 

$

 

(1,819

)

 

 

(384.6

)%

 

$

 

1,033

 

 

$

 

1,108

 

 

$

 

(75

)

 

 

(6.8

)%

Product gross profit per ecommerce unit

 

 

2,579

 

 

 

 

1,075

 

 

 

 

1,504

 

 

 

139.9

%

 

 

 

1,512

 

 

 

 

1,098

 

 

 

 

414

 

 

 

37.7

%

Total gross profit per ecommerce unit

$

 

1,233

 

 

$

 

1,548

 

 

$

 

(315

)

 

 

(20.3

)%

 

$

 

2,545

 

 

$

 

2,206

 

 

$

 

339

 

 

 

15.4

%

Ecommerce average days to sale

 

 

244

 

 

 

 

76

 

 

 

 

168

 

 

 

221.1

%

 

 

 

131

 

 

 

 

74

 

 

 

 

57

 

 

 

77.2

%

Results by Segment

 

Three Months Ended
December 31,

 

 

 

 

 

 

 

 

Year Ended
December 31,

 

 

 

 

 

 

 

 

2022

 

 

2021(1)

 

 

Change

 

% Change

 

2022

 

 

2021(1)

 

 

Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

4,144

 

 

 

21,243

 

 

 

(17,099

)

 

 

(80.5

)%

 

 

39,278

 

 

 

74,698

 

 

 

(35,420

)

 

 

(47.4

)%

Wholesale

 

1,768

 

 

 

8,742

 

 

 

(6,974

)

 

 

(79.8

)%

 

 

20,876

 

 

 

37,163

 

 

 

(16,287

)

 

 

(43.8

)%

All Other (2)

 

350

 

 

 

2,105

 

 

 

(1,755

)

 

 

(83.4

)%

 

 

3,758

 

 

 

7,212

 

 

 

(3,454

)

 

 

(47.9

)%

Total units

 

6,262

 

 

 

32,090

 

 

 

(25,828

)

 

 

(80.5

)%

 

 

63,912

 

 

 

119,073

 

 

 

(55,161

)

 

 

(46.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

$

141,758

 

 

$

738,720

 

 

$

(596,962

)

 

 

(80.8

)%

 

$

1,364,195

 

 

$

2,442,369

 

 

$

(1,078,174

)

 

 

(44.1

)%

Wholesale

 

23,039

 

 

 

121,543

 

 

 

(98,504

)

 

 

(81.0

)%

 

 

293,528

 

 

 

498,981

 

 

 

(205,453

)

 

 

(41.2

)%

Retail Financing (3)

 

32,537

 

 

 

—

 

 

 

32,537

 

 

 

100.0

%

 

 

152,542

 

 

 

—

 

 

 

152,542

 

 

 

100.0

%

All Other (4)

 

12,015

 

 

 

74,228

 

 

 

(62,213

)

 

 

(83.8

)%

 

 

138,636

 

 

 

242,905

 

 

 

(104,269

)

 

 

(42.9

)%

Total revenue

$

209,349

 

 

$

934,491

 

 

$

(725,142

)

 

 

(77.6

)%

 

$

1,948,901

 

 

$

3,184,255

 

 

$

(1,235,354

)

 

 

(38.8

)%

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

$

5,110

 

 

$

32,888

 

 

$

(27,778

)

 

 

(84.5

)%

 

$

99,973

 

 

$

164,746

 

 

$

(64,773

)

 

 

(39.3

)%

Wholesale

 

(4,359

)

 

 

7,783

 

 

 

(12,142

)

 

 

(156.0

)%

 

 

(10,620

)

 

 

18,120

 

 

 

(28,740

)

 

 

(158.6

)%

Retail Financing (3)

 

28,744

 

 

 

—

 

 

 

28,744

 

 

 

100.0

%

 

 

138,381

 

 

 

—

 

 

 

138,381

 

 

 

100.0

%

All Other (4)

 

(36

)

 

 

4,035

 

 

 

(4,071

)

 

 

(100.9

)%

 

 

17,053

 

 

 

19,233

 

 

 

(2,180

)

 

 

(11.3

)%

Total gross profit

$

29,459

 

 

$

44,706

 

 

$

(15,247

)

 

 

(34.1

)%

 

$

244,787

 

 

$

202,099

 

 

$

42,688

 

 

 

21.1

%

Gross profit (loss) per unit (5):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

$

1,233

 

 

$

1,548

 

 

$

(315

)

 

 

(20.3

)%

 

$

2,545

 

 

$

2,206

 

 

$

339

 

 

 

15.4

%

Wholesale

$

(2,465

)

 

$

890

 

 

$

(3,355

)

 

 

(377.0

)%

 

$

(509

)

 

$

488

 

 

$

(997

)

 

 

(204.3

)%

(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
December 31,

 

 

 

 

 

 

 

 

Year Ended
December 31,

 

 

 

 

 

 

 

 

 

2022

 

 

 

2021

 

 

Change

 

% Change

 

 

2022

 

 

 

2021

 

 

Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

Compensation & benefits

$

 

52,043

 

 

$

 

59,332

 

 

$

(7,289

)

 

 

(12.3

)%

 

$

 

251,153

 

 

$

 

204,913

 

 

$

46,240

 

 

 

22.6

%

Marketing expense

 

 

9,852

 

 

 

 

37,214

 

 

 

(27,362

)

 

 

(73.5

)%

 

 

 

79,670

 

 

 

 

125,481

 

 

 

(45,811

)

 

 

(36.5

)%

Outbound logistics

 

 

(902

)

 

 

 

27,800

 

 

 

(28,702

)

 

 

(103.2

)%

 

 

 

39,023

 

 

 

 

85,788

 

 

 

(46,765

)

 

 

(54.5

)%

Occupancy and related costs

 

 

5,955

 

 

 

 

4,849

 

 

 

1,106

 

 

 

22.8

%

 

 

 

23,363

 

 

 

 

17,448

 

 

 

5,915

 

 

 

33.9

%

Professional fees

 

 

6,870

 

 

 

 

8,435

 

 

 

(1,565

)

 

 

(18.6

)%

 

 

 

33,455

 

 

 

 

24,386

 

 

 

9,069

 

 

 

37.2

%

Software and IT costs

 

 

11,164

 

 

 

 

8,383

 

 

 

2,781

 

 

 

33.2

%

 

 

 

44,570

 

 

 

 

27,749

 

 

 

16,821

 

 

 

60.6

%

Other

 

 

5,778

 

 

 

 

20,328

 

 

 

(14,550

)

 

 

(71.6

)%

 

 

 

95,153

 

 

 

 

62,058

 

 

 

33,095

 

 

 

53.3

%

Total selling, general & administrative expenses

$

 

90,760

 

 

$

 

166,341

 

 

$

(75,581

)

 

 

(45.4

)%

 

$

 

566,387

 

 

$

 

547,823

 

 

$

18,564

 

 

 

3.4

%

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 realignment costs, acquisition related costs, change in fair value of finance receivables, goodwill impairment charge, gain on debt extinguishment, acceleration of non-cash stock-based compensation, and other costs, which primarily relate to the impairment of long-lived assets. Changes in fair value of finance receivables can fluctuate significantly from period to period and relate 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. Therefore, these historical finance receivables acquired, which are accounted for under the fair value option, will experience fluctuations in value from period to period. We believe it is appropriate to remove this temporary volatility from our Adjusted EBITDA results to better reflect our ongoing business model. Additionally, these historical finance receivables acquired from UACC are expected to run-off within approximately 12 months.

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
December 31,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

(in thousands)

 

Net income (loss)

$

24,765

 

 

$

(129,792

)

 

$

(451,910

)

 

$

(370,911

)

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

12,076

 

 

 

7,228

 

 

 

40,693

 

 

 

21,948

 

Interest income

 

(6,372

)

 

 

(3,053

)

 

 

(19,363

)

 

 

(10,341

)

Provision (benefit) for income taxes

 

2,405

 

 

 

375

 

 

 

(19,680

)

 

 

754

 

Depreciation and amortization

 

10,702

 

 

 

3,718

 

 

 

38,707

 

 

 

13,215

 

EBITDA

$

43,576

 

 

$

(121,524

)

 

$

(411,553

)

 

$

(345,335

)

Realignment costs

$

2,253

 

 

$

—

 

 

$

15,025

 

 

$

—

 

Acquisition related costs

 

—

 

 

 

1,678

 

 

 

5,653

 

 

 

5,090

 

Change in fair value of finance receivables

 

3,917

 

 

 

—

 

 

 

8,372

 

 

 

—

 

Goodwill impairment charge

 

—

 

 

 

—

 

 

 

201,703

 

 

 

—

 

Gain on debt extinguishment

 

(126,767

)

 

 

—

 

 

 

(164,684

)

 

 

—

 

Acceleration of non-cash stock-based compensation

 

2,439

 

 

 

—

 

 

 

2,439

 

 

 

—

 

Other

 

3,679

 

 

 

—

 

 

 

5,806

 

 

 

—

 

Adjusted EBITDA

$

(70,903

)

 

$

(119,846

)

 

$

(337,239

)

 

$

(340,245

)

Non-recurring costs to address operational and customer experience issues

 

374

 

 

 

—

 

 

 

25,433

 

 

 

—

 

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

$

(70,529

)

 

$

(119,846

)

 

$

(311,806

)

 

$

(340,245

)

Securitization gain

 

—

 

 

 

—

 

 

 

(45,589

)

 

 

—

 

Adjusted EBITDA excluding securitization gain

$

(70,903

)

 

$

(119,846

)

 

$

(382,828

)

 

$

(340,245

)

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

$

(70,529

)

 

$

(119,846

)

 

$

(357,395

)

 

$

(340,245

)

FOURTH QUARTER 2022 AS COMPARED TO THIRD QUARTER 2022

 

Three Months Ended
December 31,

 

Three Months Ended
September 30,

 

 

 

 

 

 

 

2022

 

2022

 

Change

 

% Change

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Total revenues

$

209,349

 

 

$

340,797

 

 

$

(131,448

)

 

 

(38.6

)%

Total gross profit

$

29,459

 

 

$

67,331

 

 

$

(37,872

)

 

 

(56.2

)%

Ecommerce units sold

 

4,144

 

 

 

6,428

 

 

 

(2,284

)

 

 

(35.5

)%

Ecommerce revenue

$

141,758

 

 

$

225,441

 

 

$

(83,683

)

 

 

(37.1

)%

Ecommerce gross profit

$

5,110

 

 

$

27,034

 

 

$

(21,924

)

 

 

(81.1

)%

Vehicle gross (loss) profit per ecommerce unit

$

(1,346

)

 

$

2,267

 

 

$

(3,613

)

 

 

(159.4

)%

Product gross profit per ecommerce unit

 

2,579

 

 

 

1,939

 

 

 

640

 

 

 

33.0

%

Total gross profit per ecommerce unit

$

1,233

 

 

$

4,206

 

 

$

(2,973

)

 

 

(70.7

)%

Wholesale units sold

 

1,768

 

 

 

3,128

 

 

 

(1,360

)

 

 

(43.5

)%

Wholesale revenue

$

23,039

 

 

$

47,604

 

 

$

(24,565

)

 

 

(51.6

)%

Wholesale gross loss

$

(4,359

)

 

$

(1,574

)

 

$

(2,785

)

 

 

176.9

%

Wholesale gross loss per unit

$

(2,465

)

 

$

(503

)

 

$

(1,962

)

 

 

(390.1

)%

Retail Financing revenue

$

32,537

 

 

$

40,654

 

 

$

(8,117

)

 

 

(20.0

)%

Retail Financing gross profit

$

28,744

 

 

$

35,954

 

 

$

(7,210

)

 

 

(20.1

)%

Total selling, general, and administrative expenses

$

90,760

 

 

$

134,643

 

 

$

(43,883

)

 

 

(32.6

)%

 

Three Months Ended
December 31,

 

Three Months Ended
September 30,

 

 

 

 

 

 

 

2022

 

2022

 

Change

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

Net income (loss)

$

24,765

 

 

$

(51,127

)

 

$

75,892

 

 

 

148.4

%

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

12,076

 

 

 

9,704

 

 

 

2,372

 

 

 

24.4

%

Interest income

 

(6,372

)

 

 

(5,104

)

 

 

(1,268

)

 

 

24.8

%

Provision for income taxes

 

2,405

 

 

 

899

 

 

 

1,506

 

 

 

167.5

%

Depreciation and amortization

 

10,702

 

 

 

9,995

 

 

 

707

 

 

 

7.1

%

EBITDA

$

43,576

 

 

$

(35,633

)

 

$

79,209

 

 

 

222.3

%

Realignment costs

$

2,253

 

 

$

3,243

 

 

$

(990

)

 

 

(30.5

)%

Change in fair value of finance receivables

 

3,917

 

 

 

(3,012

)

 

 

6,929

 

 

 

230.0

%

Gain on debt extinguishment

 

(126,767

)

 

 

(37,917

)

 

 

(88,850

)

 

 

234.3

%

Acceleration of non-cash stock-based compensation

 

2,439

 

 

 

—

 

 

 

2,439

 

 

 

100.0

%

Other

 

3,679

 

 

 

—

 

 

 

3,679

 

 

 

100.0

%

Adjusted EBITDA

$

(70,903

)

 

$

(73,319

)

 

$

2,416

 

 

 

3.3

%

Non-recurring costs to address operational and customer experience issues

 

374

 

 

 

15,785

 

 

 

(15,411

)

 

 

(97.6

)%

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

$

(70,529

)

 

$

(57,534

)

 

$

(12,995

)

 

 

(22.6

)%

Securitization gain

 

—

 

 

 

(15,972

)

 

 

15,972

 

 

 

100.0

%

Adjusted EBITDA excluding securitization gain

$

(70,903

)

 

$

(89,291

)

 

$

18,388

 

 

 

20.6

%

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

$

(70,529

)

 

$

(73,506

)

 

$

2,977

 

 

 

4.0

%

Financial Outlook

For the full year 2023, we expect the following results:

  • Adjusted EBITDA(1) of $(250.0) to $(200.0) million
  • Year-end cash and cash equivalents of $150.0 to $200.0 million

(1) A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for the full year 2023 Financial Outlook is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future. We have provided a reconciliation of GAAP to non-GAAP financial measures for the fourth quarter and full year 2022 in the reconciliation table in the Non-GAAP Financial Measures section above.

The foregoing estimates are forward-looking statements that reflect the Company’s expectations as of February 28, 2023 and are subject to substantial uncertainty. See “Forward-Looking Statements” below.

Conference Call & Webcast Information

Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Wednesday, March 1, 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; our ability to improve our transaction processes and customer experience; our plans to sell through aged vehicles, improve variable cost per unit and reduce fixed costs; our future growth, our business strategy and our plans, including our ongoing ability to integrate and develop United Auto Credit Corporation into a captive finance operation; our future results of operations and financial position, including our ability to improve our unit economics and our outlook for the full year 2023, including with respect to our liquidity and our plans to enhance liquidity. 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, 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
December 31,

 

2022

 

2021

ASSETS

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

$

398,915

 

 

$

1,132,325

 

Restricted cash (including restricted cash of consolidated VIEs of $24.7 million and $0 million, respectively)

 

73,095

 

 

 

82,450

 

Accounts receivable, net of allowance of $21.5 million and $8.9 million, respectively

 

13,967

 

 

 

105,433

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $11.5 million and $0 million, respectively)

 

12,939

 

 

 

—

 

Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $305.9 million and $0 million, respectively)

 

321,626

 

 

 

—

 

Inventory

 

320,648

 

 

 

726,384

 

Beneficial interests in securitizations

 

20,592

 

 

 

—

 

Prepaid expenses and other current assets

 

58,327

 

 

 

55,700

 

Total current assets

 

1,220,109

 

 

 

2,102,292

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $119.6 million and $0 million, respectively)

 

140,235

 

 

 

—

 

Property and equipment, net

 

50,201

 

 

 

37,042

 

Intangible assets, net

 

158,910

 

 

 

28,207

 

Goodwill

 

—

 

 

 

158,817

 

Operating lease right-of-use assets

 

23,568

 

 

 

15,359

 

Other assets

 

26,004

 

 

 

25,033

 

Total assets

$

1,619,027

 

 

$

2,366,750

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Accounts payable

$

34,702

 

 

$

52,651

 

Accrued expenses

 

76,795

 

 

 

121,508

 

Vehicle floorplan

 

276,988

 

 

 

512,801

 

Warehouse credit facilities of consolidated VIEs

 

229,518

 

 

 

—

 

Current portion of securitization debt of consolidated VIEs at fair value

 

47,239

 

 

 

—

 

Deferred revenue

 

10,655

 

 

 

75,803

 

Operating lease liabilities, current

 

9,730

 

 

 

6,889

 

Other current liabilities

 

17,693

 

 

 

57,604

 

Total current liabilities

 

703,320

 

 

 

827,256

 

Long term debt, net of current portion (including securitization debt of consolidated VIEs of $32.6 million and $0 million at fair value, respectively)

 

402,154

 

 

 

610,618

 

Operating lease liabilities, excluding current portion

 

20,129

 

 

 

9,592

 

Other long-term liabilities

 

18,183

 

 

 

4,090

 

Total liabilities

 

1,143,786

 

 

 

1,451,556

 

Commitments and contingencies (Note 14)

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized as of December 31, 2022 and 2021; 138,201,903 and 137,092,891 shares issued and outstanding as of December 31, 2022 and 2021, respectively

 

135

 

 

 

135

 

Additional paid-in-capital

 

2,075,798

 

 

 

2,063,841

 

Accumulated deficit

 

(1,600,692

)

 

 

(1,148,782

)

Total stockholders’ equity

 

475,241

 

 

 

915,194

 

Total liabilities and stockholders’ equity

$

1,619,027

 

 

$

2,366,750

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2022

 

2021

 

2022

 

2021

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Retail vehicle, net

$

142,579

 

 

$

785,262

 

 

$

1,425,842

 

 

$

2,583,417

 

Wholesale vehicle

 

23,039

 

 

 

121,543

 

 

 

293,528

 

 

 

498,981

 

Product, net

 

10,793

 

 

 

24,402

 

 

 

62,747

 

 

 

88,824

 

Finance

 

32,537

 

 

 

—

 

 

 

152,542

 

 

 

—

 

Other

 

401

 

 

 

3,284

 

 

 

14,242

 

 

 

13,033

 

Total revenue

 

209,349

 

 

 

934,491

 

 

 

1,948,901

 

 

 

3,184,255

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

Retail vehicle

 

147,867

 

 

 

774,613

 

 

 

1,382,005

 

 

 

2,495,587

 

Wholesale vehicle

 

27,399

 

 

 

113,760

 

 

 

304,148

 

 

 

480,861

 

Finance

 

3,793

 

 

 

—

 

 

 

14,161

 

 

 

—

 

Other

 

831

 

 

 

1,413

 

 

 

3,800

 

 

 

5,708

 

Total cost of sales

 

179,890

 

 

 

889,786

 

 

 

1,704,114

 

 

 

2,982,156

 

Total gross profit

 

29,459

 

 

 

44,705

 

 

 

244,787

 

 

 

202,099

 

Selling, general and administrative expenses

 

90,760

 

 

 

166,341

 

 

 

566,387

 

 

 

547,823

 

Depreciation and amortization

 

10,562

 

 

 

3,614

 

 

 

38,290

 

 

 

12,891

 

Impairment charges

 

5,746

 

 

 

—

 

 

 

211,873

 

 

 

—

 

Loss from operations

 

(77,609

)

 

 

(125,250

)

 

 

(571,763

)

 

 

(358,615

)

Gain on debt extinguishment

 

(126,767

)

 

 

—

 

 

 

(164,684

)

 

 

—

 

Interest expense

 

12,076

 

 

 

7,228

 

 

 

40,693

 

 

 

21,948

 

Interest income

 

(6,372

)

 

 

(3,053

)

 

 

(19,363

)

 

 

(10,341

)

Other loss (income), net

 

16,284

 

 

 

(7

)

 

 

43,181

 

 

 

(65

)

Income (loss) before provision for income taxes

 

27,170

 

 

 

(129,418

)

 

 

(471,590

)

 

 

(370,157

)

Provision (benefit) for income taxes

 

2,405

 

 

 

375

 

 

 

(19,680

)

 

 

754

 

Net income (loss)

$

24,765

 

 

$

(129,793

)

 

$

(451,910

)

 

$

(370,911

)

Net income (loss) per share attributable to common stockholders, basic

$

0.18

 

 

$

(0.95

)

 

$

(3.28

)

 

$

(2.72

)

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

 

138,176,258

 

 

 

136,948,461

 

 

 

137,907,444

 

 

 

136,429,791

 

Net income (loss) per share attributable to common stockholders, diluted

$

0.18

 

 

$

(0.95

)

 

$

(3.28

)

 

$

(2.72

)

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

 

146,577,839

 

 

 

136,948,461

 

 

 

137,907,444

 

 

 

136,429,791

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Year Ended
December 31,

 

2022

 

2021

Operating activities

 

 

 

 

 

Net loss

$

(451,910

)

 

$

(370,911

)

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

 

 

 

 

 

Impairment charges

 

211,873

 

 

 

—

 

Gain on debt extinguishment

 

(164,684

)

 

 

—

 

Depreciation and amortization

 

38,707

 

 

 

13,215

 

Amortization of debt issuance costs

 

4,809

 

 

 

2,872

 

Realized gains on securitization transactions

 

(45,589

)

 

 

—

 

Deferred taxes

 

(23,855

)

 

 

—

 

Losses on finance receivables and securitization debt, net

 

66,839

 

 

 

—

 

Stock-based compensation expense

 

11,957

 

 

 

13,409

 

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

 

1,812

 

 

 

9,471

 

Provision for bad debt

 

13,406

 

 

 

9,416

 

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

 

6,541

 

 

 

—

 

Amortization of unearned discounts on finance receivables at fair value

 

(14,593

)

 

 

—

 

Other, net

 

(7,512

)

 

 

203

 

Changes in operating assets and liabilities:

 

 

 

 

 

Finance receivables, held for sale

 

 

 

 

 

Originations of finance receivables held for sale

 

(625,575

)

 

 

—

 

Principal payments received on finance receivables held for sale

 

64,521

 

 

 

—

 

Proceeds from sale of finance receivables held for sale, net

 

509,612

 

 

 

—

 

Other

 

(7,701

)

 

 

—

 

Accounts receivable

 

78,060

 

 

 

(53,206

)

Inventory

 

403,924

 

 

 

(312,208

)

Prepaid expenses and other current assets

 

4,146

 

 

 

(32,452

)

Other assets

 

(2,546

)

 

 

(9,172

)

Accounts payable

 

(24,281

)

 

 

19,321

 

Accrued expenses

 

(53,553

)

 

 

61,170

 

Deferred revenue

 

(65,148

)

 

 

50,943

 

Other liabilities

 

(38,325

)

 

 

29,241

 

Net cash used in operating activities

 

(109,065

)

 

 

(568,688

)

Investing activities

 

 

 

 

 

Finance receivables at fair value

 

 

 

 

 

Purchases of finance receivables at fair value

 

(56,484

)

 

 

—

 

Principal payments received on finance receivables at fair value

 

132,391

 

 

 

—

 

Proceeds from sale of finance receivables at fair value, net

 

43,262

 

 

 

—

 

Principal payments received on beneficial interests

 

8,341

 

 

 

—

 

Purchase of property and equipment

 

(24,234

)

 

 

(28,413

)

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

 

(267,488

)

 

 

(75,875

)

Net cash used in investing activities

 

(164,212

)

 

 

(104,288

)

Financing activities

 

 

 

 

 

Principal repayment under secured financing agreements

 

(192,839

)

 

 

—

 

Proceeds from vehicle floorplan

 

1,403,042

 

 

 

2,713,350

 

Repayments of vehicle floorplan

 

(1,638,855

)

 

 

(2,529,780

)

Proceeds from warehouse credit facilities

 

520,800

 

 

 

—

 

Repayments of warehouse credit facilities

 

(467,216

)

 

 

—

 

Repayments of convertible senior notes

 

(90,208

)

 

 

—

 

Proceeds from issuance of convertible senior notes

 

—

 

 

 

625,000

 

Issuance costs paid for convertible senior notes

 

—

 

 

 

(16,129

)

Proceeds from exercise of stock options

 

—

 

 

 

5,766

 

Other financing activities

 

(4,212

)

 

 

(495

)

Net cash (used in) provided by financing activities

 

(469,488

)

 

 

797,712

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(742,765

)

 

 

124,736

 

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

 

1,214,775

 

 

 

1,090,039

 

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

$

472,010

 

 

$

1,214,775

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

(unaudited)

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid for interest

$

34,907

 

 

$

15,964

 

Cash paid for income taxes

$

2,409

 

 

$

403

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

Fair value of beneficial interests received in securitization transactions

$

30,082

 

 

$

—

 

Issuance of common stock for CarStory acquisition

$

—

 

 

$

38,811

 

Fair value of unvested stock options assumed for acquisition of business

$

—

 

 

$

1,017

 

 

Investor Relations:
Vroom
Liam Harrington
investors@vroom.com

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

Source: Vroom, Inc.