PARTS iD, Inc. Reports Third Quarter 2022 Results
PARTS iD reported a 22.1% decrease in net revenue for Q3 2022, totaling $79.9 million, down from $102.6 million in Q3 2021. Despite challenges like supply chain issues and high inflation, gross margin slightly improved to 19.9%. Operating loss narrowed to $(3.0) million from $(4.2) million. Overall, the net loss widened to $(6.3) million compared to $(3.3) million a year ago. Adjusted EBITDA turned positive at $0.2 million. For the year-to-date, net revenue dropped 18.4% to $279.0 million, with cash on hand decreasing to $4.2 million.
- Slight improvement in adjusted EBITDA at $0.2 million, compared to $(0.1) million in Q3 2021.
- Reduced operating loss to $(3.0) million from $(4.2) million year-over-year.
- Achieved a projected 15% net reduction in outbound shipping costs through an improved shipping contract.
- Net revenue fell 22.1% year-over-year to $79.9 million, driven by a 28% decline in traffic.
- Widened net loss to $(6.3) million from $(3.3) million in Q3 2021.
- Adjusted EBITDA declined to $(0.2 million) for the first nine months compared to $5.3 million in 2021.
Third Quarter 2022 Financial Summary (Comparisons versus Third Quarter 2021)
-
Net revenue was
as compared to$79.9 million .$102.6 million
-
Gross margin was
19.9% as compared to19.8% .
-
Operating expenses as a percent of net revenue were
23.7% as compared to23.9% .
-
Operating loss was
as compared to operating loss of$(3.0) million .$(4.2) million
-
Net loss was
as compared to net loss of$(6.3) million .$(3.3) million
-
Adjusted EBITDA was
compared to$0.2 million .$(0.1) million
First Nine Months 2022 Financial Summary (Comparisons versus First Nine Months 2021)
-
Net revenue was
as compared to$279.0 million .$342.1 million
-
Gross margin was
19.7% as compared to20.2% .
-
Operating expenses as a percent of net revenue were
22.8% as compared to21.5% .
-
Operating loss was
as compared to operating loss of$(8.8) million .$(4.2) million
-
Net loss was
as compared to net loss of$(11.1) million .$(3.4) million
-
Adjusted EBITDA was
compared to$(0.2) million .$5.3 million
Management Commentary
“Despite the challenging operating environment that includes supply chain constraints, high inflation, rising interest rates and softening consumer demand for discretionary goods, we preserved margins and liquidity and achieved positive adjusted EBITDA,” said
Third Quarter 2022 Financial Results
Third quarter 2022 net revenue decreased
Gross profit for the third quarter of 2022 decreased to
Operating expenses were
Operating loss for the third quarter of 2022 was
Net loss for the third quarter of 2022 was
Adjusted EBITDA was
First Nine Months 2022 Financial Results
Net revenue for the first nine months of 2022 decreased
Gross profit for the first nine months of 2022 decreased
Operating expenses were
Operating loss for the first nine months of 2022 was
Net loss for the first nine months of 2022 was
Adjusted EBITDA was
Balance Sheet
As of
On
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, 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: costs related to operating as a public company; difficulties in managing our international business operations, particularly due to the ongoing conflict in
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 |
|
|||||||
|
2022 |
|
2021 |
|||||
|
Unaudited |
|
Audited |
|||||
ASSETS Current assets |
|
|
||||||
Cash |
$ |
4,184,006 |
|
$ |
23,203,230 |
|
||
Accounts receivable |
|
2,423,474 |
|
|
2,157,108 |
|
||
Inventory |
|
4,694,781 |
|
|
5,754,748 |
|
||
Prepaid expenses and other current assets |
|
6,638,522 |
|
|
4,874,704 |
|
||
Total current assets |
|
17,940,783 |
|
|
35,989,790 |
|
||
|
|
|
||||||
Property and equipment, net |
|
13,489,016 |
|
|
13,700,876 |
|
||
Intangible assets |
|
262,966 |
|
|
262,966 |
|
||
Deferred tax assets |
|
- |
|
|
2,314,907 |
|
||
Operating lease right-of-use |
|
1,253,724 |
|
|
- |
|
||
Other assets |
|
267,707 |
|
|
267,707 |
|
||
Total assets |
$ |
33,214,196 |
|
$ |
52,536,246 |
|
||
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
|
|
||||||
Current liabilities |
|
|
||||||
Accounts payable |
$ |
36,200,511 |
|
$ |
40,591,938 |
|
||
Customer deposits |
|
8,838,813 |
|
|
15,497,857 |
|
||
Accrued expenses |
|
5,939,896 |
|
|
6,221,330 |
|
||
Other current liabilities |
|
2,917,478 |
|
|
3,930,841 |
|
||
Operating lease liabilities |
|
697,333 |
|
|
- |
|
||
Total current liabilities |
|
54,594,031 |
|
|
66,241,966 |
|
||
Other non-current liabilities |
|
|
||||||
Operating lease, net of current portion |
|
556,391 |
|
|
- |
|
||
Total liabilities |
|
55,150,422 |
|
|
66,241,966 |
|
||
|
|
|
||||||
COMMITMENTS AND CONTINGENCIES (Note 6) |
||||||||
SHAREHOLDERS’ DEFICIT |
||||||||
100,000,000 Class A shares authorized and 34,114,449 and 33,965,804 issued and
outstanding, as of |
|
3,411 |
|
|
3,396 |
|
||
Additional paid in capital |
|
9,866,946 |
|
6,973,541 |
||||
Accumulated deficit |
|
(31,806,583 |
) |
(20,682,657 |
) |
|||
Total shareholders’ deficit |
|
(21,936,226 |
) |
(13,705,720 |
) |
|||
Total liabilities and shareholders’ deficit |
$ |
33,214,196 |
|
$ |
52,536,246 |
Consolidated Condensed Statements of Operations
For the three and nine months ended |
||||||||||||||||
Three months ending
|
|
Nine months ending
|
||||||||||||||
|
2022 (Unaudited) |
|
2021 (Unaudited) |
|
2022 (Unaudited) |
|
2021 (Unaudited) |
|||||||||
Net revenue |
$ |
79,884,740 |
|
$ |
102,595,793 |
|
$ |
279,034,366 |
|
$ |
342,078,753 |
|
||||
Cost of goods sold |
|
63,962,534 |
|
|
82,316,633 |
|
|
224,034,701 |
|
|
272,826,703 |
|
||||
|
|
|
|
|
||||||||||||
Gross profit |
|
15,922,206 |
|
|
20,279,160 |
|
|
54,999,665 |
|
|
69,252,050 |
|
||||
|
|
|
|
|
||||||||||||
Operating expenses: |
|
|
|
|
||||||||||||
Advertising |
|
7,329,172 |
|
|
9,730,026 |
|
|
26,468,121 |
|
|
31,136,731 |
|
||||
Selling, general and administrative |
|
9,458,749 |
|
|
12,906,797 |
|
|
31,072,365 |
|
|
36,868,521 |
|
||||
Depreciation |
|
2,113,695 |
|
|
1,887,641 |
|
|
6,210,590 |
|
|
5,480,995 |
|
||||
Total operating expenses |
|
18,901,616 |
|
|
24,524,464 |
|
|
63,751,076 |
|
|
73,486,247 |
|
||||
Loss from operations |
|
(2,979,410 |
) |
|
(4,245,304 |
) |
|
(8,751,411 |
) |
|
(4,234,197 |
) |
||||
|
|
|
|
|
||||||||||||
Interest and financing expense |
|
50,000 |
|
|
229 |
|
|
50,000 |
|
|
7,114 |
|
||||
Loss before income taxes |
|
(3,029,410 |
) |
|
(4,245,533 |
) |
|
(8,801,411 |
) |
|
(4,241,311 |
) |
||||
Income tax expense (benefit) |
|
3,241,618 |
|
|
(908,011 |
) |
|
2,322,515 |
|
|
(885,088 |
) |
||||
Net loss |
$ |
(6,271,028 |
) |
$ |
(3,337,522 |
) |
$ |
(11,123,926 |
) |
$ |
(3,356,223 |
) |
||||
|
|
|
|
|
||||||||||||
Loss per common share |
|
|
|
|
||||||||||||
Loss per share (basic and diluted) |
$ |
(0.18 |
) |
$ |
(0.10 |
) |
$ |
(0.33 |
) |
$ |
(0.10 |
) |
||||
Weighted average number of shares (basic and diluted) |
|
34,064,266 |
|
|
33,173,456 |
|
|
34,004,944 |
|
|
33,161,368 |
|
||||
Condensed Consolidated Statements of Cash Flows
For the nine months ended |
||||||||
|
||||||||
Nine months ended
|
||||||||
|
|
2022 |
|
|
|
2021 |
|
|
Cash Flows from Operating Activities: |
|
|
||||||
Net loss |
$ |
(11,123,926 |
) |
$ |
(3,356,223 |
) |
||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
||||||
Depreciation |
|
6,210,590 |
|
|
5,480,995 |
|
||
Deferred income tax expense (benefit) |
|
2,314,907 |
|
|
(913,561 |
) |
||
Share based compensation expense |
|
1,601,848 |
|
|
3,303,145 |
|
||
Amortization of right-of-use asset |
|
239,879 |
|
|
- |
|
||
Gain on the sale of fixed assets |
|
(63,524 |
) |
|
- |
|
||
Changes in operating assets and liabilities: |
|
|
||||||
Accounts receivable |
|
(266,366 |
) |
|
(270,750 |
) |
||
Inventory |
|
1,059,967 |
|
|
(1,524,797 |
) |
||
Prepaid expenses and other current assets |
|
(1,763,818 |
) |
|
235,245 |
|
||
Accounts payable |
|
(4,391,427 |
) |
|
1,124,844 |
|
||
Customer deposits |
|
(6,659,044 |
) |
|
1,767,997 |
|
||
Accrued expenses |
|
(281,434 |
) |
|
865,363 |
|
||
Operating lease liabilities |
|
(239,879 |
) |
|
- |
|
||
Other current liabilities |
|
(1,013,363 |
) |
|
310,481 |
|
||
Net cash (used in) provided by operating activities |
|
(14,375,590 |
) |
|
7,022,739 |
|
||
|
|
|
||||||
Cash Flows from Investing Activities: |
|
|
||||||
Proceeds from sale of fixed assets |
|
90,250 |
|
|
- |
|
||
Purchase of property and equipment |
|
(64,882 |
) |
|
(306,165 |
) |
||
Website and software development costs |
|
(4,669,002 |
) |
|
(5,391,016 |
) |
||
Net cash used in investing activities |
|
(4,643,634 |
) |
|
(5,697,181 |
) |
||
|
|
|
||||||
Cash Flows from Financing Activities: |
|
|
||||||
Principal paid on notes payable |
|
- |
|
|
(15,956 |
) |
||
Net cash used in financing activities |
|
- |
|
|
(15,956 |
) |
||
|
|
|
||||||
Net change in cash |
|
(19,019,224 |
) |
|
1,309,602 |
|
||
Cash, beginning of period |
|
23,203,230 |
|
|
22,202,706 |
|
||
Cash, end of period |
$ |
4,184,006 |
|
$ |
23,512,308 |
|
||
|
|
|
||||||
Supplemental disclosure of cash flows information: |
|
|
||||||
Cash paid for interest expenses |
$ |
- |
|
$ |
7,114 |
|
||
Cash paid for income taxes |
$ |
5,000 |
|
$ |
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
|
||||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Net income (loss) |
$ |
(6,271,028 |
) |
$ |
(3,337,522 |
) |
$ |
(11,123,926 |
) |
$ |
(3,356,223 |
) |
||||
Interest expense |
|
50,000 |
|
|
229 |
|
|
50,000 |
|
|
7,114 |
|
||||
Income taxes (benefits) |
|
3,241,618 |
|
|
(908,011 |
) |
|
2,322,515 |
|
|
(885,088 |
) |
||||
Depreciation |
|
2,113,695 |
|
|
1,887,641 |
|
|
6,210,590 |
|
|
5,480,995 |
|
||||
EBITDA |
|
(865,715 |
) |
|
(2,357,663 |
) |
|
(2,540,821 |
) |
|
1,246,798 |
|
||||
Stock compensation expenses |
|
915,007 |
|
|
1,981,717 |
|
|
1,601,848 |
|
|
3,303,145 |
|
||||
Legal & settlement expenses (1) |
|
109,913 |
|
|
238,293 |
|
|
738,654 |
|
|
721,480 |
|
||||
Adjusted EBITDA Total |
$ |
159,205 |
|
$ |
(137,653 |
) |
$ |
(200,319 |
) |
$ |
5,271,423 |
|
||||
% to revenue |
|
0.2 |
% |
|
-0.1 |
% |
|
-0.1 |
% |
|
1.5 |
% |
(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/20221109005744/en/
Investors:
ICR
ir@partsidinc.com
Media:
FischTank PR
partsid@fischtankpr.com
Source:
FAQ
What are PARTS iD's Q3 2022 financial results?
What is the operating loss for PARTS iD in Q3 2022?
How did PARTS iD's adjusted EBITDA perform in Q3 2022?
What are the main challenges faced by PARTS iD in Q3 2022?