PARTS iD, Inc. Reports Second Quarter 2022 Results
PARTS iD, Inc. (NYSE American: ID) reported a 20.1% decrease in net revenue for Q2 2022, totaling $104.3 million, compared to $130.4 million in Q2 2021. Gross margin slightly declined to 19.7%. The company recorded an operating loss of $0.9 million, down from operating income of $0.8 million in the prior year. Adjusted EBITDA fell to $1.3 million from $4.2 million year-over-year. Management highlighted challenges from inflation and supply chain issues but noted efforts to optimize costs and achieve annual savings of $12 million.
- Initiatives aimed at expanding automotive repair and original equipment categories.
- Efforts to optimize advertising spend and reduce workforce aimed at protecting profitability.
- Expected annualized savings of approximately $12 million from cost-cutting measures.
- Net revenue decreased by 20.1% compared to Q2 2021.
- Operating loss of $(0.9) million in Q2 2022 versus operating income in Q2 2021.
- Decline in traffic by 15.5% and conversion rate by 15.4%.
Second Quarter 2022 Financial Summary (Comparisons versus Second Quarter 2021 and First Quarter 2022)
Net revenue was
-
Gross margin was
19.7% as compared to20.0% in Q2 2021 and19.5% in Q1 2022. -
Operating expenses as a percent of net revenue were
20.6% as compared to19.4% in Q2 2021 and24.6% in Q1 2022. -
Operating loss was
as compared to operating income of$(0.9) million in Q2 2021 and an operating loss of$0.8 million in Q1 2022.$(4.8) million -
Net loss was
as compared to net income of$(0.9) million in Q2 2021 and net loss of$0.6 million in Q1 2022.$(4.0) million -
Adjusted EBITDA was
compared to$1.3 million in Q2 2021 and$4.2 million in Q1 2022.$(1.7) million -
Net cash from profit and loss account was
compared with$1.0 million in Q2 2021 and$3.7 million in Q1 2022.$(1.8) million
Management Commentary
“We made good progress advancing certain key growth initiatives during the second quarter, in particular, expanding our automotive repair and original equipment categories, and enhancing the product catalog and margins for our adjacent verticals,” said
Second Quarter 2022 Financial Results
Second quarter 2022 revenue decreased
Gross profit for the second quarter of 2022 decreased to
Operating expenses were
Operating loss for the second quarter of 2022 was
Net loss for the second 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
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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Unaudited |
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Audited |
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ASSETS |
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Current assets |
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Cash |
|
$ |
7,317,070 |
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|
$ |
23,203,230 |
|
Accounts receivable |
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|
2,518,879 |
|
|
|
2,157,108 |
|
Inventory |
|
|
5,384,467 |
|
|
|
5,754,748 |
|
Prepaid expenses and other current assets |
|
|
6,095,608 |
|
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|
4,874,704 |
|
Total current assets |
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|
21,316,024 |
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|
35,989,790 |
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Property and equipment, net |
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|
14,083,440 |
|
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|
13,700,876 |
|
Intangible assets |
|
|
262,966 |
|
|
|
262,966 |
|
Deferred tax assets |
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|
3,236,618 |
|
|
|
2,314,907 |
|
Operating lease right-of-use |
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|
1,493,603 |
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|
- |
|
Other assets |
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267,707 |
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|
267,707 |
|
Total assets |
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$ |
40,660,358 |
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$ |
52,536,246 |
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LIABILITIES AND SHAREHOLDERS’ DEFICIT |
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Current liabilities |
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Accounts payable |
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$ |
35,459,245 |
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$ |
40,591,938 |
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Customer deposits |
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|
10,828,002 |
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|
15,497,857 |
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Accrued expenses |
|
|
6,667,828 |
|
|
|
6,221,330 |
|
Other current liabilities |
|
|
3,227,123 |
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|
|
3,930,841 |
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Operating lease liabilities |
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|
766,367 |
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|
- |
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Total current liabilities |
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56,948,565 |
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66,241,966 |
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Other non-current liabilities |
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Operating lease, net of current portion |
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727,236 |
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|
- |
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Total liabilities |
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|
57,675,801 |
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|
66,241,966 |
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COMMITMENTS AND CONTINGENCIES (Note 6) |
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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 |
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- |
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- |
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Common stock, |
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10,000,000 Class F shares authorized and 0 issued and outstanding |
|
|
- |
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- |
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100,000,000 Class A shares authorized and 34,062,616 and 33,965,804 issued and outstanding, as of |
|
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3,406 |
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|
3,396 |
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Additional paid in capital |
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8,516,706 |
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6,973,541 |
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Accumulated deficit |
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(25,535,555 |
) |
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(20,682,657 |
) |
Total shareholders’ deficit |
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(17,015,443 |
) |
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(13,705,720 |
) |
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Total liabilities and shareholders’ deficit |
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$ |
40,660,358 |
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$ |
52,536,246 |
|
Consolidated Condensed Statements of Operations
For the three and six months ended |
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Three months ended
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Six months ended
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2022 |
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2021 |
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2022 |
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2021 |
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Net revenue |
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$ |
104,257,478 |
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$ |
130,409,332 |
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$ |
199,149,626 |
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$ |
239,482,960 |
|
Cost of goods sold |
|
|
83,674,247 |
|
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|
104,270,051 |
|
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|
160,072,167 |
|
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190,510,070 |
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Gross profit |
|
|
20,583,231 |
|
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|
26,139,281 |
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39,077,459 |
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48,972,890 |
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Operating expenses: |
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Advertising |
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9,437,657 |
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10,907,319 |
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19,138,949 |
|
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|
21,406,705 |
|
Selling, general and administrative |
|
|
9,940,889 |
|
|
|
12,603,017 |
|
|
|
21,613,616 |
|
|
|
23,961,724 |
|
Depreciation |
|
|
2,142,433 |
|
|
|
1,819,581 |
|
|
|
4,096,895 |
|
|
|
3,593,354 |
|
Total operating expenses |
|
|
21,520,979 |
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|
|
25,329,917 |
|
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|
44,849,460 |
|
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|
48,961,783 |
|
(Loss) income from operations |
|
|
(937,748 |
) |
|
|
809,364 |
|
|
|
(5,772,001 |
) |
|
|
11,107 |
|
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|
|
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|
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Interest expense |
|
|
- |
|
|
|
395 |
|
|
|
- |
|
|
|
6,885 |
|
(Loss) income before income taxes |
|
|
(937,748 |
) |
|
|
808,969 |
|
|
|
(5,772,001 |
) |
|
|
4,222 |
|
Income tax (benefit) expense |
|
|
(38,037 |
) |
|
|
182,857 |
|
|
|
(919,103 |
) |
|
|
22,923 |
|
Net (loss) income |
|
$ |
(899,711 |
) |
|
$ |
626,112 |
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$ |
(4,852,898 |
) |
|
$ |
(18,701 |
) |
(Loss) income available to common shareholders |
|
$ |
(899,711 |
) |
|
$ |
626,112 |
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|
$ |
(4,852,898 |
) |
|
$ |
(18,701 |
) |
(Loss) income per common share |
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(Loss) income per share (basic and diluted) |
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$ |
(0.03 |
) |
|
$ |
0.02 |
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$ |
(0.14 |
) |
|
$ |
(0.00 |
) |
Weighted average number of shares
|
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|
33,983,680 |
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|
33,130,599 |
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|
33,974,791 |
|
|
|
33,002,738 |
|
Condensed Consolidated Statements of Cash Flows
For the six months ended |
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Six months ended
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2022 |
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2021 |
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Cash Flows from Operating Activities: |
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Net loss |
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$ |
(4,852,898 |
) |
|
$ |
(18,701 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
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Depreciation |
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|
4,096,895 |
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|
3,593,354 |
|
Deferred income tax benefit |
|
|
(921,711 |
) |
|
|
- |
|
Share based compensation expense |
|
|
686,841 |
|
|
|
1,321,428 |
|
Amortization of right-of-use asset |
|
|
194,526 |
|
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
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|
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Accounts receivable |
|
|
(361,771 |
) |
|
|
(501,531 |
) |
Inventory |
|
|
370,281 |
|
|
|
(1,440,606 |
) |
Prepaid expenses and other current assets |
|
|
(1,220,904 |
) |
|
|
1,252,952 |
|
Accounts payable |
|
|
(5,132,693 |
) |
|
|
(32,202 |
) |
Customer deposits |
|
|
(4,669,856 |
) |
|
|
3,351,055 |
|
Accrued expenses |
|
|
446,498 |
|
|
|
1,024,590 |
|
Operating lease liabilities |
|
|
(194,526 |
) |
|
|
- |
|
Other current liabilities |
|
|
(703,718 |
) |
|
|
500,584 |
|
Net cash (used in) provided by operating activities |
|
|
(12,263,036 |
) |
|
|
9,050,923 |
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Cash Flows from Investing Activities: |
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Purchase of property and equipment |
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(45,360 |
) |
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(283,786 |
) |
Website and software development costs |
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(3,577,764 |
) |
|
|
(3,611,451 |
) |
Net cash used in investing activities |
|
|
(3,623,124 |
) |
|
|
(3,895,237 |
) |
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Cash Flows from Financing Activities: |
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Principal paid on notes payable |
|
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- |
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|
(10,473 |
) |
Net cash used in financing activities |
|
|
- |
|
|
|
(10,473 |
) |
|
|
|
|
|
|
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Net change in cash |
|
|
(15,886,160 |
) |
|
|
5,145,213 |
|
Cash, beginning of period |
|
|
23,203,230 |
|
|
|
22,202,706 |
|
Cash, end of period |
|
$ |
7,317,070 |
|
|
$ |
27,347,919 |
|
|
|
|
|
|
|
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Supplemental disclosure of cash flows information: |
|
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|
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Cash paid for interest |
|
$ |
- |
|
|
$ |
6,885 |
|
Cash paid for income taxes |
|
$ |
2,608 |
|
|
$ |
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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Six months ended
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2022 |
|
|
2021 |
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|
2022 |
|
|
2021 |
|
||||
Net income (loss) |
|
$ |
(899,711 |
) |
|
$ |
626,112 |
|
|
$ |
(4,852,898 |
) |
|
$ |
(18,701 |
) |
Interest expense |
|
|
- |
|
|
|
395 |
|
|
|
- |
|
|
|
6,885 |
|
Income taxes (benefits) |
|
|
(38,037 |
) |
|
|
182,857 |
|
|
|
(919,103 |
) |
|
|
22,923 |
|
Depreciation |
|
|
2,142,433 |
|
|
|
1,819,581 |
|
|
|
4,096,895 |
|
|
|
3,593,354 |
|
EBITDA |
|
|
1,204,685 |
|
|
|
2,628,945 |
|
|
|
(1,675,106 |
) |
|
|
3,604,461 |
|
Stock compensation expenses |
|
|
(180,529 |
) |
|
|
1,292,604 |
|
|
|
686,841 |
|
|
|
1,321,428 |
|
Legal & settlement expenses (1) |
|
|
316,743 |
|
|
|
243,426 |
|
|
|
596,385 |
|
|
|
483,186 |
|
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Adjusted EBITDA Total |
|
$ |
1,340,899 |
|
|
$ |
4,164,975 |
|
|
$ |
(391,880 |
) |
|
$ |
5,409,075 |
|
% to revenue |
|
|
1.3 |
% |
|
|
3.2 |
% |
|
|
-0.2 |
% |
|
|
2.3 |
% |
(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 intellectual property (“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/20220808005500/en/
Investors:
ICR
ir@partsidinc.com
Media
FischTank PR
partsid@fischtankpr.com
Source:
FAQ
What were PARTS iD's Q2 2022 revenue figures?
How did the gross margin change in Q2 2022 for PARTS iD?
What was the net loss for PARTS iD in Q2 2022?
What measures is PARTS iD taking to improve financial performance?