8-K
0001580864false00015808642022-05-092022-05-09

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 9, 2022

 

 

VROOM, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

 

Delaware

 

001-39315

 

90-1112566

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

1375 Broadway, Floor 11

New York, New York 10018

(Address of principal executive offices) (Zip Code)

 

(855) 524-1300

(Registrant’s telephone number, include area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

VRM

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

On May 9, 2022, Vroom, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 7.01. Regulation FD Disclosure.

On May 10, 2022, members of the Company’s management will hold an earnings conference call to discuss the Company’s financial results for the quarter ended March 31, 2022, and the presentation furnished as Exhibit 99.2 to this Current Report on Form 8-K will accompany management’s comments.

 

The information contained in Item 2.02, including Exhibit 99.1 hereto and in Item 7.01, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings, unless expressly incorporated by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits relating to Item 2.02 and Item 7.01 shall be deemed to be furnished, and not filed:

 

Exhibit No.

 

Description

 

 

99.1

 

Press Release dated May 9, 2022.

99.2

 

Earnings Conference Call Presentation for the Quarter Ended March 31, 2022.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

VROOM, INC.

 

 

 

Date: May 9, 2022

 

By:

 

/s/ Robert R. Krakowiak

 

 

 

 

Robert R. Krakowiak

 

 

 

 

Chief Financial Officer

 

 


EX-99.1

https://cdn.kscope.io/bb92753adf991f9607367054496cfa72-img63169428_0.jpg  

Exhibit 99.1

 

Vroom Exceeds Q1 Guidance Across All Key Financial Metrics

 

Vroom Announces Business Realignment Plan

 

NEW YORK – May 9, 2022 – 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, 2022.

 

HIGHLIGHTS OF FIRST QUARTER 2022

 

19,473 ecommerce units sold, up 26% versus prior year
Ecommerce revenue of $675.4 million, up 60% versus prior year
Ecommerce gross profit of $34.3 million, up 8% versus prior year
Completed the first auto loan securitization transaction

 

Thomas Shortt, Chief Executive Officer of Vroom, commented: “The first quarter of 2022 surpassed our expectations on our key financial metrics, delivering better than expected ecommerce gross profit per unit, total revenue, ecommerce unit, and adjusted EBITDA results. As we announced previously, we completed the acquisition of United Auto Credit Corporation ("UACC") in February and successfully completed our first auto loan securitization in the same month. As we look forward, we intend to prioritize unit economics over growth, reduce operating expenses, and focus on 4 key initiatives to build a profitable business. I would like to thank all of our Vroommates and our third-party partners for their support in serving our customers. I'm excited about the future for Vroom and look forward to sharing more on our long term vision with you at our upcoming investor event on May 26th.”

 

Robert Krakowiak, Vroom’s Chief Financial Officer, commented: “We are pleased with our first quarter performance. Our results came in ahead of guidance as we delivered higher than anticipated ecommerce results, expense control, and immediate benefits from acquiring United Auto Credit Corporation. For 2022, we are focusing on prioritizing unit economics over growth throughout our business. With the announcement of our business realignment plan, Vroom is positioned to significantly reduce our operating expenses and accelerate our path to profitability.”

 

BUSINESS REALIGNMENT PLAN

 

Today, Vroom also announced that its Board of Directors has approved a business realignment plan designed to position Vroom for long-term profitable growth by prioritizing unit economics, reducing operating expenses and maximizing liquidity. Key aspects of the plan include reducing targeted unit sales to focus on sustainable sales margins and gross profit per unit growth, right-sizing the organization through a workforce reduction, further regionalizing our business and operations, reducing marketing expense by focusing on highest-ROI channels while aligning with volume trajectory and further automating key portions of sales operations. Once the business realignment plan is fully executed, the Company expects to achieve approximately $135.0 to $165.0 million of cost reductions and operating improvements across its operations for the remainder of 2022, when compared to the first quarter annualized.

 

“Consumers love our business model and we have proven we can sell and acquire vehicles at scale,” said Mr. Shortt. “We will now sharpen our focus on improving our unit economics, reducing our operating costs, and maximizing our liquidity.”

 

Mr. Krakowiak said “With our current cash position and modest leverage, we are committed to responsibly managing our business and prudently deploying our capital as we position Vroom for long-term profitable growth and value creation for our shareholders.”
 

 


 

 

FIRST QUARTER 2022 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,

 

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

 

 

Change

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Ecommerce units sold

 

 

 

19,473

 

 

 

 

15,504

 

 

 

 

3,969

 

 

 

25.6

%

Ecommerce revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle revenue

 

$

 

652,625

 

 

$

 

408,314

 

 

$

 

244,311

 

 

 

59.8

%

Product revenue

 

 

 

22,739

 

 

 

 

13,994

 

 

 

 

8,745

 

 

 

62.5

%

Total ecommerce revenue

 

$

 

675,364

 

 

$

 

422,308

 

 

$

 

253,056

 

 

 

59.9

%

Ecommerce gross profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit

 

$

 

11,581

 

 

$

 

17,843

 

 

$

 

(6,262

)

 

 

(35.1

)%

Product gross profit

 

 

 

22,739

 

 

 

 

13,994

 

 

 

 

8,745

 

 

 

62.5

%

Total ecommerce gross profit

 

$

 

34,320

 

 

$

 

31,837

 

 

$

 

2,483

 

 

 

7.8

%

Average vehicle selling price per ecommerce unit

 

$

 

33,514

 

 

$

 

26,336

 

 

$

 

7,178

 

 

 

27.3

%

Gross profit per ecommerce unit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle gross profit per ecommerce unit

 

$

 

595

 

 

$

 

1,151

 

 

$

 

(556

)

 

 

(48.3

)%

Product gross profit per ecommerce unit

 

 

 

1,168

 

 

 

 

903

 

 

 

 

265

 

 

 

29.3

%

Total gross profit per ecommerce unit

 

$

 

1,763

 

 

$

 

2,054

 

 

$

 

(291

)

 

 

(14.2

)%

Ecommerce average days to sale

 

 

 

91

 

 

 

 

83

 

 

 

 

8

 

 

 

9.6

%

 

 

2

 


 

 

First Quarter 2022

 

Ecommerce Units

 

Ecommerce units sold increased 25.6% to 19,473 as a result of higher inventory levels and strong national brand recognition. The increase was also attributable to strong market demand for used vehicles, caused in part by the shortage of microchips and delays in new car manufacturing. Average monthly unique visitors to our platform increased 66.9% to 2.6 million.

 

Ecommerce Revenue

 

Ecommerce revenue increased 59.9% to $675.3 million.

Ecommerce Vehicle revenue increased 59.8% to $652.6 million. The increase in ecommerce Vehicle revenue was primarily attributable to the increase in the average selling price per unit, which increased from $26,336 to $33,514, primarily attributable to market appreciation, as well as an increase in ecommerce units sold.
Ecommerce Product revenue increased 62.5% to $22.7 million. The increase in ecommerce Product revenue was primarily attributable to an increase in ecommerce Product revenue per unit, which increased from $903 to $1,168 per unit, as well as an increase in ecommerce units sold.

 

Ecommerce Gross Profit

 

Ecommerce gross profit increased 7.8% to $34.3 million.

 

Ecommerce Vehicle gross profit decreased 35.1% to $11.6 million. The decrease in ecommerce Vehicle gross profit was primarily due to a decrease in ecommerce Vehicle gross profit per unit, which decreased from $1,151 to $595, partially offset by an increase in ecommerce units sold.
Ecommerce Product gross profit increased 62.5% to $22.7 million. The increase in ecommerce Product gross profit was primarily attributable to the increase in ecommerce Product gross profit per unit, which increased from $903 to $1,168 per unit, as well as an increase in ecommerce units sold.

 

Ecommerce Gross Profit per Unit

 

Ecommerce gross profit per unit decreased 14.2% to $1,763.

 

Ecommerce Vehicle gross profit per unit decreased 48.3% to $595, primarily driven by lower sales margins as a result of higher depreciation on less fuel efficient vehicles, as well as higher reconditioning costs related to an increased mix of higher mileage vehicles along with significant parts inflation.
Ecommerce Product gross profit per unit increased 29.3% to $1,168, primarily driven by higher attachment rates and an increase in the average loan size as a result of a higher average selling price per unit.

 

3

 


 

Results by Segment

 

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

 

Change

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except unit data)

 

 

 

 

 

 

 

Units:

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

 

19,473

 

 

 

15,504

 

 

 

3,969

 

 

 

25.6

%

Wholesale

 

 

10,113

 

 

 

8,641

 

 

 

1,472

 

 

 

17.0

%

TDA

 

 

1,699

 

 

 

1,775

 

 

 

(76

)

 

 

(4.3

)%

Total units

 

 

31,285

 

 

 

25,920

 

 

 

5,365

 

 

 

20.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

675,364

 

 

$

422,308

 

 

$

253,056

 

 

 

59.9

%

Wholesale

 

 

139,984

 

 

 

118,024

 

 

 

21,960

 

 

 

18.6

%

TDA

 

 

56,271

 

 

 

47,587

 

 

 

8,684

 

 

 

18.2

%

Retail Financing (1)

 

 

47,687

 

 

 

 

 

 

47,687

 

 

 

100.0

%

All Other (2)

 

 

4,469

 

 

 

3,199

 

 

 

1,270

 

 

 

39.7

%

Total revenue

 

$

923,775

 

 

$

591,118

 

 

$

332,657

 

 

 

56.3

%

Gross profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

34,320

 

 

$

31,837

 

 

$

2,483

 

 

 

7.8

%

Wholesale

 

 

(2,753

)

 

 

(282

)

 

 

(2,471

)

 

 

876.2

%

TDA

 

 

1,806

 

 

 

2,791

 

 

 

(985

)

 

 

(35.3

)%

Retail Financing (1)

 

 

44,963

 

 

 

 

 

 

44,963

 

 

 

100.0

%

All Other (2)

 

 

3,304

 

 

 

1,830

 

 

 

1,474

 

 

 

80.5

%

Total gross profit

 

$

81,640

 

 

$

36,176

 

 

$

45,464

 

 

 

125.7

%

Gross profit (loss) per unit (3):

 

 

 

 

 

 

 

 

 

 

 

 

Ecommerce

 

$

1,763

 

 

$

2,054

 

 

$

(291

)

 

 

(14.2

)%

Wholesale

 

$

(272

)

 

$

(33

)

 

$

(239

)

 

 

724.2

%

TDA

 

$

1,063

 

 

$

1,572

 

 

$

(509

)

 

 

(32.4

)%

 

(1)
The Retail Financing segment represents UACC’s operations with its network of third-party dealership customers, which was acquired in February 2022.
(2)
All Other revenues and gross profit consist of the CarStory business and vehicle repair services at TDA.
(3)
Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit.

 

Total Units

 

Total units sold increased 20.7% to 31,285.

 

Ecommerce units sold increased 25.6% to 19,473, as discussed above.
Wholesale units sold increased 17.0% to 10,113, primarily driven by an increase in wholesale units purchased from consumers, a higher number of trade-in vehicles associated with the increase in the number of ecommerce units sold and strong wholesale market demand for used vehicles.
TDA units sold decreased 4.3% to 1,699.

 

Total Revenue

 

Total revenue increased 56.3% to $923.8 million.

Ecommerce revenue increased 59.9% to $675.4 million, as discussed above.
Wholesale revenue increased 18.6% to $140.0 million, primarily attributable to the increase in wholesale units sold.
TDA revenue increased 18.2% to $56.3 million, primarily due to a higher average selling price per unit, which increased from $25,921 to $32,114, partially offset by a decrease in TDA units sold.

4

 


 

Retail Financing revenue was $47.7 million and primarily included a gain on sale of $29.6 million on the auto loan securitization transaction and interest income earned on finance receivables owned by UACC prior to the acquisition of $14.9 million.

 

Total Gross Profit (Loss)

 

Total gross profit increased 125.7% to $81.6 million.

Ecommerce gross profit increased 7.8% to $34.3 million, as discussed above.
Wholesale gross loss increased to $2.8 million, primarily due to a higher Wholesale gross loss per unit of $272.
TDA gross profit decreased 35.3% to $1.8 million, primarily due to a decrease in TDA gross profit per unit of $985.
Retail Financing gross profit was $45.0 million and primarily included the gain on sale of finance receivables of $29.6 million and interest income earned on finance receivables owned by UACC prior to the acquisition of $14.9 million, partially offset by collection expenses of $1.4 million related to servicing finance receivables originated by UACC and interest expense of $0.9 million incurred on securitization debt.

 

Gross Profit (Loss) per Unit

Ecommerce gross profit per unit decreased 14.2% to $1,763, as discussed above.
Wholesale gross loss per unit increased to $272 primarily driven by lower sales margins as a result of an increase in depreciation on less fuel efficient vehicles.
TDA gross profit per unit decreased 32.4% to $1,063.

 

SG&A

 

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

2021

 

 

Change

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

 

 

 

 

 

 

Compensation & benefits

 

$

 

74,525

 

 

$

 

39,870

 

 

$

34,655

 

 

 

86.9

%

Marketing expense

 

 

 

33,735

 

 

 

 

29,558

 

 

 

4,177

 

 

 

14.1

%

Outbound logistics

 

 

 

26,748

 

 

 

 

15,366

 

 

 

11,382

 

 

 

74.1

%

Occupancy and related costs

 

 

 

5,646

 

 

 

 

3,922

 

 

 

1,724

 

 

 

44.0

%

Professional fees

 

 

 

13,299

 

 

 

 

3,998

 

 

 

9,301

 

 

 

232.6

%

Other

 

 

 

34,041

 

 

 

 

16,400

 

 

 

17,641

 

 

 

107.6

%

Total selling, general & administrative expenses

 

$

 

187,994

 

 

$

 

109,114

 

 

$

78,880

 

 

 

72.3

%

 

Selling, general and administrative expenses increased 72.3% to $188.0 million. The increase was primarily due to:

$34.7 million increase in compensation and benefits due to an increase in headcount and an increase in variable fees for third-party sales and sales support providers as a result of an increase in units sold;
$11.4 million increase in outbound logistics costs, primarily attributable to increases in market rates of logistics providers, which increased outbound logistics costs by $7.5 million, as well as the growth in ecommerce units sold, which increased outbound logistics costs by $3.9 million;

5

 


 

$9.3 million increase in professional fees, primarily related to costs incurred in connection with the acquisition of UACC as well as increased legal fees; and
$17.6 million increase in other selling, general and administrative expenses, primarily related to volume-based fees for software licenses and other variable expenses as our business continues to scale as well as additional insurance costs associated with our growing operations.

 

Goodwill Impairment Charge

 

Goodwill impairment charge of $201.7 million represents an impairment charge to write down the carrying amount of the goodwill.

 

Loss from Operations and Net Loss

 

Loss from operations increased to $315.9 million. Net loss increased to $310.5 million.

 

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, Non-GAAP net loss, and Non-GAAP net loss per share. 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, Non-GAAP net loss, and Non-GAAP net loss per share are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because EBITDA, Adjusted EBITDA, Non-GAAP net loss, and Non-GAAP net loss per share facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

 

EBITDA and Adjusted EBITDA

 

We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense and we calculate Adjusted EBITDA as EBITDA adjusted to exclude acquisition related costs, change in fair value of finance receivables and goodwill impairment charges. 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 18 months. The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net loss, which is the most directly comparable U.S. GAAP measure:

6

 


 

 

 

 

Three Months Ended
March 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Net loss

 

$

(310,459

)

 

$

(77,189

)

Adjusted to exclude the following:

 

 

 

 

 

 

Interest expense

 

 

9,380

 

 

 

3,812

 

Interest income

 

 

(3,952

)

 

 

(2,296

)

(Benefit) provision for income taxes

 

 

(23,240

)

 

 

156

 

Depreciation and amortization

 

 

7,895

 

 

 

2,906

 

EBITDA

 

$

(320,376

)

 

$

(72,611

)

Acquisition related costs

 

 

5,653

 

 

 

 

Change in fair value of finance receivables

 

 

5,621

 

 

 

 

Goodwill impairment charge

 

 

201,703

 

 

 

 

Adjusted EBITDA

 

$

(107,399

)

 

$

(72,611

)

 

Non-GAAP net loss and Non-GAAP net loss per share

 

We calculate Non-GAAP net loss as net loss adjusted to exclude acquisition related costs, change in fair value of finance receivables, and goodwill impairment charges. We calculate Non-GAAP net loss per share as Non-GAAP net loss divided by weighted average number of shares outstanding. The following table presents a reconciliation of Non-GAAP net loss and Non-GAAP net loss per share to net loss and net loss per share, which are the most directly comparable U.S. GAAP measures:

 

 

 

Three Months Ended
March 31,

 

 

 

2022

 

 

2021

 

 

(in thousands, except share and per share amounts)

 

Net loss

 

$

(310,459

)

 

$

(77,189

)

Net loss attributable to common stockholders

 

$

(310,459

)

 

$

(77,189

)

Add: Acquisition related costs

 

 

5,653

 

 

 

 

Add: Change in fair value of finance receivables

 

 

5,621

 

 

 

 

Add: Goodwill impairment charge

 

 

201,703

 

 

 

 

Non-GAAP net loss

 

$

(97,482

)

 

$

(77,189

)

 

 

 

 

 

 

 

Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted

 

 

137,259,629

 

 

 

135,497,511

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(2.26

)

 

$

(0.57

)

Impact of acquisition related costs

 

 

0.04

 

 

 

 

Impact of change in fair value of finance receivables

 

 

0.04

 

 

 

 

Impact of goodwill impairment charge

 

 

1.47

 

 

 

 

Non-GAAP net loss per share, basic and diluted

 

$

(0.71

)

 

$

(0.57

)

 

7

 


 

Financial Outlook

 

For the full-year 2022, we expect the following results:

Ecommerce unit sales of 45,000 to 55,000.
Adjusted EBITDA(1) of approximately $(375.0) to $(325.0) million.
Year-end liquidity(2) of $450.0 to $565.0 million.

 

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

 

(2)
Represents unrestricted cash and cash equivalents, excludes restricted cash and floorplan availability.

 

The foregoing estimates are forward-looking statements that reflect the Company’s expectations as of May 9, 2022 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 Tuesday, May 10, 2022 at 8:30 a.m. ET.

 

The conference call can be accessed via telephone by dialing 1-833-519-1297 (or 914-800-3868 for international access) and entering the conference ID 3598027. A live audio webcast will also be available 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 the expected timeline, our execution of and the expected benefits from our business realignment plan and cost-saving initiatives, our expectations regarding our business strategy and plans, including our ability to integrate and develop United Auto Credit Corporation into a captive finance operation, as well as our ability to scale our business, grow inventory, expand reconditioning capacity, invest in logistics and improve our end-to-end customer experience, and for future results of operations and financial position, including our ability to improve our unit economics and our outlook for the full year ended December 31, 2022. 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

8

 


 

Form 10-K for the year ended December 31, 2021, as updated by our Quarterly report on Form 10-Q for the quarter ended March 31, 2022, each of 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.

 

Investor Relations:

 

Vroom

Liam Harrington

investors@vroom.com

 

Media Contact:

 

Moxie Communications Group

Alyssa Galella

vroom@moxiegrouppr.com

(562) 294-6261

 

 

9

 


 

 

VROOM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

As of

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

600,721

 

 

$

1,132,325

 

Restricted cash (including restricted cash of consolidated VIEs of $25.5 million and $0 million, respectively)

 

 

196,809

 

 

 

82,450

 

Accounts receivable, net of allowance of $14.8 million and $8.9 million, respectively

 

 

103,911

 

 

 

105,433

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $12.1 million and $0 million, respectively)

 

 

14,900

 

 

 

 

Finance receivables held for sale, net

 

 

117,658

 

 

 

 

Inventory

 

 

741,368

 

 

 

726,384

 

Beneficial interests in securitizations

 

 

15,603

 

 

 

 

Prepaid expenses and other current assets

 

 

68,457

 

 

 

55,700

 

Total current assets

 

 

1,859,427

 

 

 

2,102,292

 

Finance receivables at fair value (including finance receivables of consolidated VIEs of $177.4 million and $0 million, respectively)

 

 

210,523

 

 

 

 

Property and equipment, net

 

 

44,657

 

 

 

37,042

 

Intangible assets, net

 

 

179,183

 

 

 

28,207

 

Goodwill

 

 

 

 

 

158,817

 

Operating lease right-of-use assets

 

 

15,321

 

 

 

15,359

 

Other assets

 

 

29,624

 

 

 

25,033

 

Total assets

 

$

2,338,735

 

 

$

2,366,750

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Accounts payable

 

$

52,172

 

 

$

52,651

 

Accrued expenses

 

 

139,156

 

 

 

121,508

 

Vehicle floorplan

 

 

569,941

 

 

 

512,801

 

Current portion of securitization debt of consolidated VIEs at fair value

 

 

138,935

 

 

 

 

Deferred revenue

 

 

73,354

 

 

 

75,803

 

Operating lease liabilities, current

 

 

7,412

 

 

 

6,889

 

Other current liabilities

 

 

36,359

 

 

 

57,604

 

Total current liabilities

 

 

1,017,329

 

 

 

827,256

 

Long term debt, net of current portion (including securitization debt of consolidated VIEs of $65.7 million and $0 million at fair value, respectively)

 

 

687,426

 

 

 

610,618

 

Operating lease liabilities, excluding current portion

 

 

8,937

 

 

 

9,592

 

Other long-term liabilities

 

 

16,679

 

 

 

4,090

 

Total liabilities

 

 

1,730,371

 

 

 

1,451,556

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 137,695,521 and 137,092,891 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

 

 

135

 

 

 

135

 

Additional paid-in-capital

 

 

2,067,470

 

 

 

2,063,841

 

Accumulated deficit

 

 

(1,459,241

)

 

 

(1,148,782

)

Total stockholders’ equity

 

 

608,364

 

 

 

915,194

 

Total liabilities and stockholders’ equity

 

$

2,338,735

 

 

$

2,366,750

 

 

10

 


 

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2022

 

 

2021

 

Revenue:

 

 

 

 

 

 

Retail vehicle, net

 

$

707,186

 

 

$

454,323

 

Wholesale vehicle

 

 

139,984

 

 

 

118,024

 

Product, net

 

 

24,449

 

 

 

15,572

 

Finance

 

 

47,687

 

 

 

 

Other

 

 

4,469

 

 

 

3,199

 

Total revenue

 

 

923,775

 

 

 

591,118

 

Cost of sales:

 

 

 

 

 

 

Retail vehicle

 

 

695,509

 

 

 

435,267

 

Wholesale vehicle

 

 

142,737

 

 

 

118,306

 

Finance

 

 

2,724

 

 

 

 

Other

 

 

1,165

 

 

 

1,369

 

Total cost of sales

 

 

842,135

 

 

 

554,942

 

Total gross profit

 

 

81,640

 

 

 

36,176

 

Selling, general and administrative expenses

 

 

187,994

 

 

 

109,114

 

Depreciation and amortization

 

 

7,856

 

 

 

2,594

 

Goodwill impairment charge

 

 

201,703

 

 

 

 

Loss from operations

 

 

(315,913

)

 

 

(75,532

)

Interest expense

 

 

9,380

 

 

 

3,812

 

Interest income

 

 

(3,952

)

 

 

(2,296

)

Other loss (income), net

 

 

12,358

 

 

 

(15

)

Loss before provision for income taxes

 

 

(333,699

)

 

 

(77,033

)

(Benefit) provision for income taxes

 

 

(23,240

)

 

 

156

 

Net loss

 

$

(310,459

)

 

$

(77,189

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(2.26

)

 

$

(0.57

)

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

 

 

137,259,629

 

 

 

135,497,511

 

 

 

11

 


 

 

VROOM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

2022

 

 

2021

 

Operating activities

 

 

 

 

 

 

Net loss

 

$

(310,459

)

 

$

(77,189

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

Goodwill impairment charge

 

 

201,703

 

 

 

 

Depreciation and amortization

 

 

7,895

 

 

 

2,906

 

Amortization of debt issuance costs

 

 

1,254

 

 

 

281

 

Realized gain on the 2022-1 securitization transaction

 

 

(29,617

)

 

 

 

Deferred taxes

 

 

(23,855

)

 

 

 

Losses on finance receivables and securitization debt, net

 

 

15,725

 

 

 

 

Stock-based compensation expense

 

 

3,629

 

 

 

2,820

 

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

 

 

469

 

 

 

(2,551

)

Other

 

 

1,795

 

 

 

1,813

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Finance receivables, held for sale

 

 

 

 

 

 

Originations of finance receivables held for sale

 

 

(118,861

)

 

 

 

Principal payments received on finance receivables held for sale

 

 

2,659

 

 

 

 

Proceeds from sale of finance receivables held for sale, net

 

 

272,309

 

 

 

 

Other

 

 

(1,705

)

 

 

 

Accounts receivable

 

 

(4,331

)

 

 

(33,140

)

Inventory

 

 

(15,453

)

 

 

88,502

 

Prepaid expenses and other current assets

 

 

6,928

 

 

 

(1,127

)

Other assets

 

 

(2,763

)

 

 

(650

)

Accounts payable

 

 

(6,824

)

 

 

9,568

 

Accrued expenses

 

 

8,036

 

 

 

12,194

 

Deferred revenue

 

 

(2,449

)

 

 

23,376

 

Other liabilities

 

 

(21,163

)

 

 

2,751

 

Net cash (used in) provided by operating activities

 

 

(15,078

)

 

 

29,554

 

Investing activities

 

 

 

 

 

 

Finance receivables at fair value

 

 

 

 

 

 

Principal payments received on finance receivables at fair value

 

 

33,570

 

 

 

 

Proceeds from sale of finance receivables at fair value, net

 

 

29,043

 

 

 

 

Principal payments received on beneficial interests

 

 

714

 

 

 

 

Purchase of property and equipment

 

 

(7,096

)

 

 

(3,239

)

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