PARTS iD, Inc. Reports Third Quarter 2021 Results
PARTS iD, Inc. (NYSE American: ID) reported a 16.7% decline in net revenue for Q3 2021, totaling $102.6 million compared to Q3 2020. This drop reflects a significant 28.9% decrease in site traffic and increased cancellations due to supply chain disruptions. Gross margin also fell to 19.8% from 22.3% year-over-year. The company recorded an operating loss of $4.2 million and a net loss of $3.3 million. Despite a 11.2% revenue increase for the first nine months, challenges remain due to rising costs and lower traffic.
- First nine months 2021 net revenue increased by 11.2% to $342.1 million compared to $307.8 million in 2020.
- Average order value rose by 12.9%, and site conversion rate improved by 16.1% in the first nine months of 2021.
- Net revenue for Q3 2021 decreased by 16.7% to $102.6 million compared to $123.2 million in Q3 2020.
- Gross margin declined to 19.8% from 22.3% year-over-year, primarily due to rising product and shipping costs.
- Operating loss of $4.2 million recorded in Q3 2021 compared to an operating income of $6.0 million in Q3 2020.
- Net loss of $3.3 million in Q3 2021, contrasting with a net income of $4.8 million in Q3 2020.
- Adjusted EBITDA turned negative at $0.1 million in Q3 2021, down from positive $8.2 million in the same prior year period.
Third Quarter 2021 Financial Summary (Comparisons versus Third Quarter 2020)
-
Net revenue was
as compared to$102.6 million .$123.2 million -
Gross margin was
19.8% as compared to22.3% . -
Operating expenses as a percent of net revenue were
23.9% as compared to17.4% . -
Operating loss was
as compared to operating income of$4.2 million .$6.0 million -
Net loss was
as compared to net income of$3.3 million .$4.8 million -
Adjusted EBITDA was negative
compared to positive$0.1 million .$8.2 million
First Nine Months 2021 Financial Summary (Comparisons versus First Nine Months 2020)
-
Net revenue increased
11.2% to as compared to$342.1 million .$307.8 million -
Gross margin was
20.2% as compared to21.7% . -
Operating expenses as a percent of net revenue were
21.5% as compared to19.1% . -
Operating loss was
as compared to operating income of$4.2 million .$7.9 million -
Net loss was
as compared to net income of$3.4 million .$6.2 million -
Adjusted EBITDA was
compared to$5.3 million .$14.4 million
Management Commentary
“While revenue trends remain favorable when viewed on a two-year basis, year-over-year revenue declined in Q3 across our core business and new verticals. Site traffic has moderated from record levels during the height of the pandemic last year and supply chain disruptions impacted product availability and put added pressure on margins.” said
Third Quarter 2021 Financial Results
Third quarter 2021 net revenue decreased
Gross profit for the third quarter of 2021 decreased to
Operating expenses were
Operating loss for the third quarter of 2021 was
Net loss for the third quarter of 2021 was
Adjusted EBITDA was negative
First Nine Months 2021 Financial Results
Net revenue for the first nine months of 2021 increased
Gross profit for the first nine months of 2021 increased
Operating expenses were
Operating loss for the first nine months of 2021 was
Net loss for the first nine months of 2021 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 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, market share gains, 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 following: competition and our ability to counter competition, including changes to the algorithms of Google and other search engines; the impact of health epidemics, including the COVID-19 pandemic, on our business and the actions we may take in response thereto; disruptions in the supply chain; difficulties in managing our international business operations, particularly in the
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 |
|||||||
(Unaudited) |
|
||||||
ASSETS |
|||||||
Current assets |
|||||||
Cash |
$ |
23,512,308 |
|
$ |
22,202,706 |
|
|
Accounts receivable |
|
2,506,877 |
|
|
2,236,127 |
|
|
Inventory |
|
6,381,062 |
|
|
4,856,265 |
|
|
Prepaid expenses and other current assets |
|
5,576,087 |
|
|
5,811,332 |
|
|
Total current assets |
|
37,976,334 |
|
|
35,106,430 |
|
|
Property and equipment, net |
|
13,025,327 |
|
|
11,470,360 |
|
|
Intangible assets |
|
237,752 |
|
|
237,752 |
|
|
Deferred tax assets |
|
2,013,361 |
|
|
1,099,800 |
|
|
Other assets |
|
267,707 |
|
|
267,707 |
|
|
Total assets |
$ |
53,520,481 |
|
$ |
48,182,049 |
|
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
Current liabilities |
|||||||
Accounts payable |
$ |
36,756,757 |
|
$ |
35,631,913 |
|
|
Customer deposits |
|
17,953,645 |
|
|
16,185,648 |
|
|
Accrued expenses |
|
6,333,933 |
|
|
5,468,570 |
|
|
Other current liabilities |
|
3,903,263 |
|
|
3,592,782 |
|
|
Notes payable, current portion |
|
3,750 |
|
|
19,706 |
|
|
Total liabilities |
|
64,951,348 |
|
|
60,898,619 |
|
|
SHAREHOLDERS' DEFICIT |
|||||||
Preferred stock, |
|||||||
1,000,000 shares authorized and 0 issued and outstanding |
|
- |
|
|
- |
|
|
Common stock, |
|||||||
10,000,000 Class F shares authorized and 0 issued and outstanding |
|
- |
|
|
- |
|
|
100,000,000 Class A shares authorized; 33,173,456 and 32,873,457 shares issued and outstanding as of |
|
3,317 |
|
|
3,287 |
|
|
Additional paid in capital |
|
4,641,896 |
|
|
- |
|
|
Accumulated deficit |
|
(16,076,080 |
) |
|
(12,719,857 |
) |
|
Total shareholders' deficit |
|
(11,430,867 |
) |
|
(12,716,570 |
) |
|
Total liabilities and shareholder's deficit |
$ |
53,520,481 |
|
$ |
48,182,049 |
|
|
Condensed Consolidated Statements of Operations |
|||||||||||||
Three months ended |
Nine months ended |
||||||||||||
2021 (Unaudited) |
2020 (Unaudited) |
2021 (Unaudited) |
2020 (Unaudited) |
||||||||||
Net revenue |
$ |
102,595,793 |
|
$ |
123,171,974 |
$ |
342,078,753 |
|
$ |
307,751,463 |
|||
Cost of goods sold |
|
82,316,633 |
|
|
95,716,087 |
|
272,826,703 |
|
|
240,928,853 |
|||
Gross profit |
|
20,279,160 |
|
|
27,455,887 |
|
69,252,050 |
|
|
66,822,610 |
|||
Operating expenses: |
|||||||||||||
Advertising |
|
9,730,026 |
|
|
9,624,007 |
|
31,136,731 |
|
|
25,014,794 |
|||
Selling, general and administrative |
|
12,906,797 |
|
|
10,134,882 |
|
36,868,521 |
|
|
28,883,134 |
|||
Depreciation |
|
1,887,641 |
|
|
1,726,574 |
|
5,480,995 |
|
|
5,034,672 |
|||
Total operating expenses |
|
24,524,464 |
|
|
21,485,463 |
|
73,486,247 |
|
|
58,932,600 |
|||
(Loss) income from operations |
|
(4,245,304 |
) |
|
5,970,424 |
|
(4,234,197 |
) |
|
7,890,010 |
|||
Interest expense |
|
229 |
|
|
863 |
|
7,114 |
|
|
7,684 |
|||
(Loss) income before income taxes |
|
(4,245,533 |
) |
|
5,969,561 |
|
(4,241,311 |
) |
|
7,882,326 |
|||
Income tax expense (benefit) |
|
(908,011 |
) |
|
1,175,607 |
|
(885,088 |
) |
|
1,659,227 |
|||
Net (loss) income |
$ |
(3,337,522 |
) |
$ |
4,793,954 |
$ |
(3,356,223 |
) |
$ |
6,223,099 |
|||
Net (loss) income |
$ |
(3,337,522 |
) |
$ |
4,793,954 |
$ |
(3,356,223 |
) |
$ |
6,223,099 |
|||
Less: Preferred stocks dividends |
|
- |
|
|
125,000 |
|
- |
|
|
375,000 |
|||
(Loss) income available to common shareholders |
$ |
(3,337,522 |
) |
$ |
4,668,954 |
$ |
(3,356,223 |
) |
$ |
5,848,099 |
|||
(Loss) income per common share |
|||||||||||||
(Loss) income per share (basic and diluted) |
$ |
(0.10 |
) |
$ |
0.19 |
$ |
(0.10 |
) |
$ |
0.23 |
|||
Weighted average number of shares (basic and diluted) |
|
33,173,456 |
|
|
24,950,958 |
|
33,060,270 |
|
|
24,950,958 |
Condensed Consolidated Statements of Cash Flows |
|||||||
Nine months ended |
|||||||
2021 (Unaudited) |
2020 (Unaudited) |
||||||
Cash Flows from Operating Activities: |
|||||||
Net ( loss) income |
$ |
(3,356,223 |
) |
$ |
6,223,099 |
|
|
Adjustments to reconcile net (loss) income |
|||||||
to net cash provided by operating activities: |
|||||||
Depreciation |
|
5,480,995 |
|
|
5,034,672 |
|
|
Deferred income tax |
|
(913,561 |
) |
|
1,359,964 |
|
|
Share based compensation expensed |
|
3,303,145 |
|
|
- |
|
|
Changes in operating assets and liabilities: |
|||||||
Accounts receivable |
|
(270,750 |
) |
|
(1,690,002 |
) |
|
Inventory |
|
(1,524,797 |
) |
|
(1,271,495 |
) |
|
Prepaid expenses and other current assets |
|
235,245 |
|
|
(141,378 |
) |
|
Accounts payable |
|
1,124,844 |
|
|
13,182,228 |
|
|
Customer deposits |
|
1,767,997 |
|
|
5,315,673 |
|
|
Accrued expenses |
|
865,363 |
|
|
(40,065 |
) |
|
Other current liabilities |
|
310,481 |
|
|
906,605 |
|
|
Net cash provided by operating activities |
|
7,022,739 |
|
|
28,879,301 |
|
|
Cash Flows from Investing Activities: |
|||||||
Purchase of property and equipment |
|
(306,165 |
) |
|
(17,700 |
) |
|
Purchase of intangible assets |
|
- |
|
|
|
(7,769 |
) |
Website and software development costs |
|
(5,391,016 |
) |
|
(5,146,408 |
) |
|
Net cash used in investing activities |
|
(5,697,181 |
) |
|
(5,171,877 |
) |
|
Cash Flows from Financing Activities: |
|||||||
Principal paid on notes payable |
|
(15,956 |
) |
|
(15,892 |
) |
|
Payments of preferred stock dividends |
|
- |
|
|
(375,000 |
) |
|
Net cash used in financing activities |
|
(15,956 |
) |
|
(390,892 |
) |
|
Net change in cash |
|
1,309,602 |
|
|
23,316,532 |
|
|
Cash, beginning of year |
|
22,202,706 |
|
|
13,618,835 |
|
|
Cash, end of year |
$ |
23,512,308 |
|
$ |
36,935,367 |
|
|
Supplemental disclosure of cash flows information: |
|||||||
Cash paid for interest |
$ |
7,114 |
|
$ |
7,684 |
|
|
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.
Three months ended |
Nine months ended |
||||||||||||
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||
Net income (loss) |
$ |
(3,337,522 |
) |
$ |
4,793,954 |
|
$ |
(3,356,223 |
) |
$ |
6,223,099 |
|
|
Interest expense |
|
229 |
|
|
863 |
|
|
7,114 |
|
|
7,684 |
|
|
Income tax expense (benefit) |
|
(908,011 |
) |
|
1,175,607 |
|
|
(885,088 |
) |
|
1,659,227 |
|
|
Depreciation |
|
1,887,641 |
|
|
1,726,574 |
|
|
5,480,995 |
|
|
5,034,672 |
|
|
EBITDA |
|
(2,357,663 |
) |
|
7,696,998 |
|
|
1,246,798 |
|
|
12,924,682 |
|
|
Stock compensation expenses included in Statement of operations |
|
1,981,717 |
|
|
- |
|
|
3,303,145 |
|
|
- |
|
|
Business combination transaction expenses(1) |
|
- |
|
|
282,618 |
|
|
- |
|
|
282,618 |
|
|
Founder's compensation(2) |
|
- |
|
|
14,987 |
|
|
- |
|
|
797,692 |
|
|
Legal & settlement expenses (3) |
|
238,293 |
|
|
152,899 |
|
|
721,480 |
|
|
103,662 |
|
|
Other items(4) |
|
- |
|
|
37,981 |
|
|
- |
|
|
253,143 |
|
|
Adjusted EBITDA Total |
$ |
(137,653 |
) |
$ |
8,185,483 |
|
$ |
5,271,423 |
|
$ |
14,361,797 |
|
|
% of revenue |
|
(0.1 |
%) |
|
7.2 |
% |
|
1.5 |
% |
|
4.7 |
% |
(1) |
Represents the expenses incurred solely related to the Business Combination that closed in |
(2) |
Represents the excess compensation paid to one of the founders of Onyx over the amount management believes would have been the compensation of an independent professional CEO for the applicable reporting periods. |
(3) |
Represents legal and settlement expenses and gains 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. |
(4) |
Includes write-offs of advances and certain fraud loss claims from earlier years that we determined were uncollectible. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211109005977/en/
Investors:
ICR
ir@partsidinc.com
Media
FischTank PR
partsid@fischtankpr.com
Source:
FAQ
What were the key financial results for PARTS iD in Q3 2021?
How did PARTS iD's net revenue perform in the first nine months of 2021?
What caused the decline in PARTS iD's gross margin in 2021?
What was the adjusted EBITDA for PARTS iD in Q3 2021?