false000158086400015808642022-08-082022-08-08

 

 

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): August 8, 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.)

3600 W Sam Houston Pkwy S, Floor 4
Houston, Texas 77042

(Address of principal executive offices) (Zip Code)

 

(518) 535-9125

(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. ☐

 

 

 

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Item 2.02. Results of Operations and Financial Condition.

On August 8, 2022, Vroom, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 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 August 9, 2022, members of the Company’s management will hold an earnings conference call to discuss the Company’s financial results for the quarter ended June 30, 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 August 8, 2022.
99.2		Earnings Conference Call Presentation for the Quarter Ended June 30, 2022.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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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: August 8, 2022		By:		/s/ Robert R. Krakowiak
				Robert R. Krakowiak
				Chief Financial Officer

 

 

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Exhibit 99.1

 

Vroom Announces Record Ecommerce Gross Profit Per Unit of $3,629

Substantial Progress on Long-Term Roadmap

 

NEW YORK – August 8, 2022 – Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the second quarter ended June 30, 2022.

 

HIGHLIGHTS OF SECOND QUARTER 2022 VERSUS FIRST QUARTER 2022

 

 

 

 

 

Tom Shortt, Chief Executive Officer of Vroom, commented: “The second quarter of 2022 marked substantial progress for Vroom against our four strategic initiatives outlined in our recent investor and analyst event. We announced record Ecommerce gross profit per unit and improved our adjusted EBITDA from the prior quarter. We also began scaling UACC-originated loans for Vroom, which contributed to our improvement in gross profit per unit. I would like to thank all of our Vroommates and our third-party partners for their support in serving our customers.”

 

Bob Krakowiak, Vroom’s Chief Financial Officer, commented: “I am proud of our achievements in the second quarter. Our Ecommerce gross profit per unit of $3,629 reflects our commitment to our first key objective of prioritizing unit economics. We are making progress in reducing our cost structure as detailed in our business realignment plan presented in May. We realized a $35 million sequential improvement in SG&A and, as a result of our initiatives, we ended the quarter with $533 million in liquidity. Based on our progress, we are continuing to forecast year-end liquidity of approximately $500 million at the midpoint.”

 

 

 

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SECOND QUARTER 2022 FINANCIAL RESULTS

 

All financial comparisons are on a year-over-year basis unless otherwise noted.

 

Ecommerce Results

 

		Three Months Ended June 30,																			Six Months Ended June 30,
		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				9,233					18,268					(9,035	)			(49.5	)%				28,706					33,772					(5,066	)			(15.0	)%
Ecommerce revenue:
Vehicle revenue		$		308,123			$		559,010			$		(250,887	)			(44.9	)%		$		960,747			$		967,324			$		(6,577	)			(0.7	)%
Product revenue				13,509					20,653					(7,144	)			(34.6	)%				36,248					34,647					1,601				4.6	%
Total ecommerce revenue		$		321,632			$		579,663			$		(258,031	)			(44.5	)%		$		996,995			$		1,001,971			$		(4,976	)			(0.5	)%
Ecommerce gross profit:
Vehicle gross profit		$		20,000			$		28,985			$		(8,985	)			(31.0	)%		$		31,580			$		46,828			$		(15,248	)			(32.6	)%
Product gross profit				13,509					20,653					(7,144	)			(34.6	)%				36,248					34,647					1,601				4.6	%
Total ecommerce gross profit		$		33,509			$		49,638			$		(16,129	)			(32.5	)%		$		67,828			$		81,475			$		(13,647	)			(16.7	)%
Average vehicle selling price per ecommerce unit		$		33,372			$		30,601			$		2,771				9.1	%		$		33,469			$		28,643			$		4,826				16.8	%
Gross profit per ecommerce unit:
Vehicle gross profit per ecommerce unit		$		2,166			$		1,587			$		579				36.5	%		$		1,100			$		1,387			$		(287	)			(20.7	)%
Product gross profit per ecommerce unit				1,463					1,131					332				29.4	%				1,263					1,026					237				23.1	%
Total gross profit per ecommerce unit		$		3,629			$		2,718			$		911				33.5	%		$		2,363			$		2,413			$		(50	)			(2.1	)%
Ecommerce average days to sale				128					68					60				88.2	%				110					76					34				44.7	%

 

 

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Results by Segment

 

		Three Months Ended June 30,																Six Months Ended June 30,
		2022				2021(1)				Change				% Change				2022				2021(1)				Change				% Change
		(in thousands, except unit data)																(in thousands, except unit data)
Units:
Ecommerce			9,233				18,268				(9,035	)			(49.5	)%			28,706				33,772				(5,066	)			(15.0	)%
Wholesale			5,867				10,020				(4,153	)			(41.4	)%			15,980				18,661				(2,681	)			(14.4	)%
All Other (2)			1,047				1,583				(536	)			(33.9	)%			2,746				3,358				(612	)			(18.2	)%
Total units			16,147				29,871				(13,724	)			(45.9	)%			47,432				55,791				(8,359	)			(15.0	)%
Revenue:
Ecommerce		$	321,632			$	579,663			$	(258,031	)			(44.5	)%		$	996,995			$	1,001,971			$	(4,976	)			(0.5	)%
Wholesale			82,901				128,108				(45,207	)			(35.3	)%			222,885				246,132				(23,247	)			(9.4	)%
Retail Financing (3)			32,121				—				32,121				100.0	%			79,808				—				79,808				100.0	%
All Other (4)			38,783				54,119				(15,336	)			(28.3	)%			99,524				104,905				(5,381	)			(5.1	)%
Total revenue		$	475,437			$	761,890			$	(286,453	)			(37.6	)%		$	1,399,212			$	1,353,008			$	46,204				3.4	%
Gross profit (loss):
Ecommerce		$	33,509			$	49,638			$	(16,129	)			(32.5	)%		$	67,828			$	81,475			$	(13,647	)			(16.7	)%
Wholesale			(1,934	)			8,516				(10,450	)			(122.7	)%			(4,686	)			8,234				(12,920	)			(156.9	)%
Retail Financing (3)			28,720				—				28,720				100.0	%			73,682				—				73,682				100.0	%
All Other (4)			6,062				4,974				1,088				21.9	%			11,173				9,595				1,578				16.4	%
Total gross profit		$	66,357			$	63,128			$	3,229				5.1	%		$	147,997			$	99,304			$	48,693				49.0	%
Gross profit (loss) per unit (5):
Ecommerce		$	3,629			$	2,718			$	911				33.5	%		$	2,363			$	2,413			$	(50	)			(2.1	)%
Wholesale		$	(330	)		$	850			$	(1,180	)			(138.8	)%		$	(293	)		$	441			$	(734	)			(166.4	)%

 

 

 

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SG&A

 

		Three Months Ended June 30,																		Six Months Ended June 30,
			2022					2021				Change				% Change					2022					2021				Change				% Change
		(in thousands)																		(in thousands)
Compensation & benefits		$		68,891			$		51,811			$	17,080				33.0	%		$		143,416			$		91,681			$	51,735				56.4	%
Marketing expense				21,138					23,495				(2,357	)			(10.0	)%				54,874					53,053				1,821				3.4	%
Outbound logistics				8,232					20,153				(11,921	)			(59.2	)%				34,980					35,271				(291	)			(0.8	)%
Occupancy and related costs				5,721					4,042				1,679				41.5	%				11,367					7,964				3,403				42.7	%
Professional fees				6,827					4,259				2,568				60.3	%				20,126					8,257				11,869				143.7	%
Software and IT costs				11,306					6,855				4,451				64.9	%				22,129					12,135				9,994				82.4	%
Other				30,875					13,283				17,592				132.4	%				54,092					24,403				29,689				121.7	%
Total selling, general & administrative expenses		$		152,990			$		123,898			$	29,092				23.5	%		$		340,984			$		232,764			$	108,220				46.5	%

 

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

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EBITDA, Adjusted EBITDA, and Adjusted EBITDA excluding securitization gain

 

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 realignment costs, acquisition related costs, change in fair value of finance receivables, goodwill impairment charge and other costs, which relate to the write off of the upfront shares issued as part of the Rocket Auto agreement and previously recognized within "Other 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 15 months. 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. The following table presents a reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA excluding securitization gain to net loss, which is the most directly comparable U.S. GAAP measure:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2022				2021				2022				2021
		(in thousands)								(in thousands)
Net loss		$	(115,089	)		$	(65,807	)		$	(425,548	)		$	(142,996	)
Adjusted to exclude the following:
Interest expense			9,533				3,880				18,913				7,692
Interest income			(3,935	)			(2,062	)			(7,887	)			(4,358	)
(Benefit) provision for income taxes			256				194				(22,984	)			350
Depreciation and amortization			10,115				3,122				18,010				6,028
EBITDA		$	(99,120	)		$	(60,673	)		$	(419,496	)		$	(133,284	)
Realignment costs		$	9,529			$	—			$	9,529			$	—
Acquisition related costs			—				—				5,653				—
Change in fair value of finance receivables			1,846				—				7,467				—
Goodwill impairment charge			—				—				201,703				—
Other			2,127				—				2,127				—
Adjusted EBITDA		$	(85,618	)		$	(60,673	)		$	(193,017	)		$	(133,284	)
Securitization gain			—				—			$	(29,617	)			—
Adjusted EBITDA excluding securitization gain		$	(85,618	)		$	(60,673	)		$	(222,634	)		$	(133,284	)

 

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Non-GAAP net loss, Non-GAAP net loss per share, Non-GAAP net loss excluding securitization gain, and Non-GAAP net loss per share excluding securitization gain

 

We calculate Non-GAAP net loss as net loss adjusted to exclude realignment costs, acquisition related costs, change in fair value of finance receivables, goodwill impairment charge, and other costs, which relate to the write off of the upfront shares issued as part of the Rocket Auto agreement and previously recognized within "Other assets". We calculate Non-GAAP net loss per share as Non-GAAP net loss divided by weighted average number of shares outstanding. We calculate Non-GAAP net loss excluding securitization gain as Non-GAAP net loss adjusted to exclude the securitization gain from the sale of UACC's finance receivables. We calculate Non-GAAP net loss per share excluding securitization gain as Non-GAAP net loss excluding securitization gain divided by weighted average number of shares outstanding. The following table presents a reconciliation of Non-GAAP net loss, Non-GAAP net loss excluding securitization gain, Non-GAAP net loss per share, and Non-GAAP net loss per share excluding securitization gain to net loss and net loss per share, which are the most directly comparable U.S. GAAP measures:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2022				2021				2022				2021
		(in thousands, except share and per share amounts)
Net loss		$	(115,089	)		$	(65,807	)		$	(425,548	)		$	(142,996	)
Net loss attributable to common stockholders		$	(115,089	)		$	(65,807	)		$	(425,548	)		$	(142,996	)
Add: Realignment costs			9,529				—				9,529				—
Add: Acquisition related costs			—				—				5,653				—
Add: Change in fair value of finance receivables			1,846