PARTS iD, Inc. Reports First Quarter 2022 Results
PARTS iD, Inc. (NYSE American: ID) reported Q1 2022 results showing a 13.0% decline in net revenue to $94.9 million, compared to Q1 2021. Gross margin decreased to 19.5% from 20.9% in 2021. The company experienced an operating loss of $(4.8) million, worsening from $(0.8) million in the previous year, with a net loss of $(4.0) million. Adjusted EBITDA was $(1.7) million. The decrease in performance is attributed to global supply chain disruptions and a reduction in customer traffic and conversion rates, despite increases in average order value and product catalog expansion.
- Increased average order value by 9.4%.
- Expanded product catalog and established new direct-to-manufacturer relationships.
- Increased margins by 15.1% in adjacent verticals and 6.2% in repair parts.
- Net revenue decreased by 13.0% compared to Q1 2021.
- Gross margin fell to 19.5%, down from 20.9% in 2021.
- Operating loss increased to $(4.8) million from $(0.8) million in Q1 2021.
- Net loss rose to $(4.0) million compared to $(0.6) million in the same period last year.
- Adjusted EBITDA declined to $(1.7) million from $1.2 million.
First Quarter 2022 Financial Summary (Comparisons versus First Quarter 2021 and 2020*)
-
Net revenue was
, a decrease of$94.9 million 13.0% compared to 2021 and an increase of34.2% compared to 2020. -
Gross margin was
19.5% as compared to20.9% in 2021 and21.4% in 2020. -
Operating expenses as a percent of net revenue were
24.6% as compared to21.7% in 2021 and23.1% in 2020. -
Operating loss was
as compared to$(4.8) million in 2021 and$(0.8) million in 2020.$(1.1) million -
Net loss was
as compared to$(4.0) million in 2021 and$(0.6) million in 2020.$(0.8) million -
Adjusted EBITDA was
compared to$(1.7) million in 2021.$1.2 million
*Note: The Company has included comparisons against the first quarter of 2020 since consumer demand in the first quarter of 2021 was significantly impacted by COVID-19 and stimulus payments.
Management Commentary
“Our first quarter revenue compared to 2020 underscores the progress we have made expanding our business inclusive of the lift we experienced from the tailwind related to record stimulus in early 2021,” said
The first quarter financial results show a continuation of the Company’s investment designed to increase revenue of its adjacent verticals, original equipment, and repair parts businesses. While these investments in the short term reduced overall margin, management remains confident that the opportunities in these markets bode well for long-term growth and profitability. To this end, during the first quarter of 2022, among other achievements, the Company further expanded its product catalog and established new direct-to-manufacturer relationships. In addition, the Company increased margins by
First Quarter 2022 Financial Results
First quarter 2022 revenue decreased
Gross profit for the first quarter of 2022 decreased to
Operating expenses were
Operating loss for the first quarter of 2022 was
Net loss for the first quarter of 2022 was
Adjusted EBITDA was
Balance Sheet
As of
Conference Call
PARTS iD’s Chief Executive Officer,
The conference call will also be available to interested parties through a live webcast at https://www.partsidinc.com/. A telephone replay of the call will be available until
In addition, the investor presentation to be reviewed during the call will be posted on the Company’s website at https://www.partsidinc.com.
About
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures that differ from financial measures calculated in accordance with
To this end, we provide EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. EBITDA consists of net income (loss) plus (a) interest expense; (b) income tax provision (or less benefit); and (c) depreciation expense. Adjusted EBITDA consists of EBITDA plus stock compensation expense and other costs, fees, expenses, write offs and other items that do not impact the fundamentals of our operations, as described further below following the reconciliation of these metrics. Management believes these non-GAAP measures provide useful information to investors in their assessment of the performance of our business. The exclusion of certain expenses in calculating EBITDA and Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis as these costs may vary independent of business performance. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
EBITDA and Adjusted EBITDA have limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
- Although depreciation is a non-cash charge, the assets being depreciated may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- EBITDA and Adjusted EBITDA do not reflect changes in our working capital;
- EBITDA and Adjusted EBITDA do not reflect income tax payments that may represent a reduction in cash available to us;
- EBITDA and Adjusted EBITDA do not reflect depreciation and interest expenses associated with the lease financing obligations; and
- Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release.
Cautionary Note Regarding Forward-Looking Statements
All statements made in this press release relating to future financial or business performance, conditions, plans, prospects, trends, or strategies and other such matters, including without limitation, expected future performance, consumer adoption, anticipated success of our business model or the potential for long term profitable growth, are forward-looking statements within the meaning of the
Important factors that may cause actual results to differ materially from the results discussed in the forward-looking statements include risks and uncertainties, including without limitation: the ongoing conflict between
Further information on the factors and risks that could cause actual results to differ from any forward-looking statements are contained in our filings with the
Condensed Consolidated Balance Sheets
As of |
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ASSETS |
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Current assets |
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Cash |
|
$ |
15,827,503 |
|
|
$ |
23,203,230 |
|
Accounts receivable |
|
|
3,090,131 |
|
|
|
2,157,108 |
|
Inventory |
|
|
5,972,282 |
|
|
|
5,754,748 |
|
Prepaid expenses and other current assets |
|
|
5,534,506 |
|
|
|
4,874,704 |
|
Total current assets |
|
|
30,424,422 |
|
|
|
35,989,790 |
|
|
|
|
|
|
|
|
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Property and equipment, net |
|
|
14,024,686 |
|
|
|
13,700,876 |
|
Intangible assets |
|
|
262,966 |
|
|
|
262,966 |
|
Deferred tax assets |
|
|
3,195,973 |
|
|
|
2,314,907 |
|
Operating lease right-of-use |
|
|
1,074,390 |
|
|
|
- |
|
Other assets |
|
|
267,707 |
|
|
|
267,707 |
|
Total assets |
|
$ |
49,250,144 |
|
|
$ |
52,536,246 |
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
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Current liabilities |
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|
|
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Accounts payable |
|
$ |
35,606,725 |
|
|
$ |
40,591,938 |
|
Customer deposits |
|
|
17,941,597 |
|
|
|
15,497,857 |
|
Accrued expenses |
|
|
6,948,508 |
|
|
|
6,221,330 |
|
Other current liabilities |
|
|
4,046,351 |
|
|
|
3,930,841 |
|
Operating lease liabilities |
|
|
680,173 |
|
|
|
- |
|
Total current liabilities |
|
|
65,223,354 |
|
|
|
66,241,966 |
|
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|
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|
|
|
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Other non-current liabilities |
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Operating lease, net of current portion |
|
|
394,217 |
|
|
|
- |
|
Total liabilities |
|
|
65,617,571 |
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|
|
66,241,966 |
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SHAREHOLDERS’ DEFICIT |
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Preferred stock, |
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1,000,000 shares authorized and 0 issued and outstanding |
|
|
- |
|
|
|
- |
|
Common stock, |
|
|
|
|
|
|
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10,000,000 Class F shares authorized and 0 issued and outstanding |
|
|
- |
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|
- |
|
100,000,000 Class A shares authorized and 33,965,804 issued and outstanding, as of |
|
|
3,396 |
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|
|
3,396 |
|
Additional paid in capital |
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|
8,265,021 |
|
|
|
6,973,541 |
|
Accumulated deficit |
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|
(24,635,844 |
) |
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|
(20,682,657 |
) |
Total shareholders’ deficit |
|
|
(16,367,427 |
) |
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|
(13,705,720 |
) |
Total liabilities and shareholders’ deficit |
|
$ |
49,250,144 |
|
|
$ |
52,536,246 |
|
Condensed Consolidated Statements of Operations
For the three months ended |
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Three
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Three
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Net revenue |
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$ |
94,892,148 |
|
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$ |
109,073,628 |
|
Cost of goods sold |
|
|
76,397,920 |
|
|
|
86,240,019 |
|
|
|
|
|
|
|
|
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Gross profit |
|
|
18,494,228 |
|
|
|
22,833,609 |
|
|
|
|
|
|
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|
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Operating expenses: |
|
|
|
|
|
|
|
|
Advertising |
|
|
9,701,292 |
|
|
|
10,499,386 |
|
Selling, general and administrative |
|
|
11,672,727 |
|
|
|
11,358,707 |
|
Depreciation |
|
|
1,954,462 |
|
|
|
1,773,773 |
|
Total operating expenses |
|
|
23,328,481 |
|
|
|
23,631,866 |
|
Loss from operations |
|
|
(4,834,253 |
) |
|
|
(798,257 |
) |
|
|
|
|
|
|
|
|
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Interest expense |
|
|
- |
|
|
|
6,490 |
|
Loss before income tax benefit |
|
|
(4,834,253 |
) |
|
|
(804,747 |
) |
Income tax benefit |
|
|
(881,066 |
) |
|
|
(159,934 |
) |
Net loss |
|
$ |
(3,953,187 |
) |
|
$ |
(644,813 |
) |
Loss per common share |
|
|
|
|
|
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Loss per share (basic and diluted) |
|
$ |
(0.12 |
) |
|
$ |
(0.02 |
) |
Weighted average number of shares (basic and diluted) |
|
|
33,965,804 |
|
|
|
32,873,457 |
|
Condensed Consolidated Statements of Cash Flows
For the three months ended |
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Three Months Ended
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Three Months Ended
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Cash Flows from Operating Activities: |
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Net loss |
|
$ |
(3,953,187 |
) |
|
$ |
(644,813 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,954,462 |
|
|
|
1,773,773 |
|
Deferred tax benefit |
|
|
(881,066 |
) |
|
|
- |
|
Amortization of right-of-use-assets |
|
|
248,391 |
|
|
|
- |
|
Share based compensation expense |
|
|
867,370 |
|
|
|
28,824 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(933,023 |
) |
|
|
(1,812,046 |
) |
Inventory |
|
|
(217,534 |
) |
|
|
(3,399,458 |
) |
Prepaid expenses and other current assets |
|
|
(659,802 |
) |
|
|
1,717,564 |
|
Accounts payable |
|
|
(4,985,213 |
) |
|
|
5,641,863 |
|
Customer deposits |
|
|
2,443,740 |
|
|
|
11,080,694 |
|
Accrued expenses |
|
|
727,178 |
|
|
|
1,298,977 |
|
Operating lease liabilities |
|
|
(248,391 |
) |
|
|
- |
|
Other current liabilities |
|
|
115,510 |
|
|
|
1,332,584 |
|
Net cash (used in) provided by operating activities |
|
|
(5,521,565 |
) |
|
|
17,017,962 |
|
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|
|
|
|
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Cash Flows from Investing Activities: |
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Purchase of property and equipment |
|
|
(16,200 |
) |
|
|
(13,099 |
) |
Website and software development costs |
|
|
(1,837,962 |
) |
|
|
(1,759,175 |
) |
Net cash used in investing activities |
|
|
(1,854,162 |
) |
|
|
(1,772,274 |
) |
|
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|
|
|
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Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
Principal paid on notes payable |
|
|
- |
|
|
|
(5,156 |
) |
Net cash used in financing activities |
|
|
- |
|
|
|
(5,156 |
) |
|
|
|
|
|
|
|
|
|
Net change in cash |
|
|
(7,375,727 |
) |
|
|
15,240,532 |
|
Cash, beginning of period |
|
|
23,203,230 |
|
|
|
22,202,706 |
|
Cash, end of period |
|
$ |
15,827,503 |
|
|
$ |
37,443,238 |
|
|
|
|
|
|
|
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Supplemental disclosure of cash flows information: |
|
|
|
|
|
|
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Operating cash outflow from operating leases |
|
$ |
249,838 |
|
|
$ |
- |
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
6,490 |
|
Cash paid for income taxes |
|
$ |
- |
|
|
$ |
4,000 |
|
The following table reflects the reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for each of the periods indicated.
|
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Three months ended
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2022 |
|
|
2021 |
|
||
Net loss |
|
$ |
(3,953,187 |
) |
|
$ |
(644,813 |
) |
Interest expense |
|
|
- |
|
|
|
6,490 |
|
Income tax benefit |
|
|
(881,066 |
) |
|
|
(159,934 |
) |
Depreciation |
|
|
1,954,462 |
|
|
|
1,773,773 |
|
EBITDA |
|
|
(2,879,791 |
) |
|
|
975,516 |
|
Stock compensation expense included in statement of operations |
|
|
867,370 |
|
|
|
28,824 |
|
Legal & settlement expenses (1) |
|
|
311,998 |
|
|
|
243,426 |
|
Adjusted EBITDA Total |
|
$ |
(1,700,423 |
) |
|
$ |
1,247,766 |
|
% of revenue |
|
|
(1.8 |
)% |
|
|
1.3 |
% |
(1) Represents legal and settlement expenses related to significant matters that do not impact the fundamentals of our operations, pertaining to: (i) causes of action between certain of the Company’s shareholders and which involves claims directly against the Company seeking the fulfillment of alleged indemnification obligations with respect to these matters, and (ii) trademark and IP protection cases. We are involved in routine IP litigation, commercial litigation and other various litigation matters. We review litigation matters from both a qualitative and quantitative perspective to determine if excluding the losses or gains will provide our investors with useful incremental information. Litigation matters can vary in their characteristics, frequency and significance to our operating results.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220510006015/en/
Investors:
ICR
ir@partsidinc.com
Media
FischTank PR
partsid@fischtankpr.com
Source:
FAQ
What were PARTS iD's Q1 2022 financial results?
How did PARTS iD's gross margin change in Q1 2022?
What was the operating loss for PARTS iD in Q1 2022?
What contributed to the decline in PARTS iD's revenue in Q1 2022?