STOCK TITAN

Shift Announces Fourth Quarter Results

Rhea-AI Impact
(Moderate)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary

Shift Technologies reported a successful fourth quarter of 2022 with $65.6 million in revenue from selling 2,520 retail units. The company has completed its merger with CarLotz, establishing an omnichannel selling model. Shift regained compliance with Nasdaq's minimum bid price requirement, closing the matter successfully. Despite a net income of $13 million, driven by a $76.7 million gain from the merger, the adjusted EBITDA loss was $25.5 million. For Q1 2023, Shift anticipates revenue between $56-$58 million and an adjusted GPU between $1,600-$1,800, indicating ongoing operational adjustments.

Positive
  • Achieved $65.6 million in revenue during Q4 2022.
  • Transitioned to an omnichannel selling model successfully post-merger with CarLotz.
  • Regained compliance with Nasdaq minimum bid price requirement.
Negative
  • Adjusted EBITDA loss of $25.5 million in Q4 2022.
  • SG&A expenses remained high at $41.9 million, or 64.0% of revenue.
  • Sold 2,520 retail units and achieved $65.6 million in revenue
  • Successfully closed the merger with CarLotz and transitioned to omnichannel selling model
  • Regained compliance with Nasdaq Stock Market minimum bid price requirement

SAN FRANCISCO, March 28, 2023 (GLOBE NEWSWIRE) -- Shift Technologies, Inc. (Nasdaq: SFT), a leading end-to-end ecommerce platform for buying and selling used cars, today reported fourth quarter financial results for the period ended December 31, 2022. Management’s commentary on fourth quarter financial results and outlook for the first quarter 2023 can be found by accessing the Company’s prepared remarks on investors.shift.com, or by listening to today’s conference call. A live audio webcast will also be available on Shift’s Investor Relations website.

“2022 was a year of significant change for Shift,” said CEO Jeff Clementz. “Given market dynamics of the auto industry and capital markets, we adjusted our strategy to prioritize balance sheet health, reduce cash burn, and accelerate our path to profitability. During the fourth quarter, we closed our merger with CarLotz and began our transition to an omnichannel selling model which is now complete. We also continue to invest in our technology and marketplace to improve the customer experience and expand our business. Given the structural changes to our strategy, we expect sequential improvement in financial performance each quarter in 2023.”

In addition to announcing fourth quarter results, the Company announces the following:

  • On March 22, 2023, the Company was informed by the Nasdaq Stock Market that the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2), otherwise known as the minimum bid price requirement, and the matter is now closed.
  • The Company has closed its location in Downers Grove, IL, to focus on its West Coast markets.

Fourth Quarter 2022 Operating Results

All comparisons for the quarter are year-over-year unless otherwise specified.

  • Total revenue for the quarter was $65.6 million.
  • Total retail units sold were 2,520.
  • Gross profit per unit was $895; Adjusted gross profit per unit1 (“Adjusted GPU”) was $1,041.
  • Net income was $13.0 million or 20% of revenue, compared to a net loss of $75.8 million or 47% of revenue in the third quarter of 2022. Net income for the fourth quarter includes a gain on bargain purchase of $76.7 million related to the acquisition of CarLotz, Inc. Adjusted EBITDA1 loss was $25.5 million or 38.9% of revenue, compared to $30.0 million or 18.5% of revenue in the third quarter of 2022.
  • SG&A expenses were $41.9 million, or 64.0% of revenue, versus $63.8 million or 32.5% of revenue last year and $49.8 million, or 30.8% of revenue in the third quarter of 2022.

First Quarter 2023 and Full Year 2023 Outlook

We are providing guidance for the first quarter of fiscal year 2023 as follows:

  • Revenue in the range of $56 - $58 million,
  • Adjusted GPU1,2 in the range of $1,600 - $1,800
  • Adjusted EBITDA1,2 loss of $24 - $26 million
  • Q1'23 ending cash balance of approximately $70.0 million.

Guidance for the 2023 full year is as follows:

  • Adjusted SG&A expenses to end the year between $85 - $95 million annualized

____________________________________________________________
1Adjusted Gross Profit, Adjusted Gross Profit per Unit (GPU), Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP financial measures. Please see the discussion in the section “Explanation of Non-GAAP Measures” and the reconciliations included at the end of this press release.
2Specific quantifications of the amounts that would be required to reconcile these items are not available. The Company believes that because of the forward looking nature of the adjusted EBITDA loss and adjusted gross profit guidance, there is uncertainty and unpredictability with respect to certain of its GAAP measures which preclude the Company from providing accurate guidance on certain forward-looking GAAP to non-GAAP reconciliations. The Company believes that providing estimates of the amounts that would be required to reconcile the range of the Company’s adjusted EBITDA and adjusted gross profit would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above.

Shift Fourth Quarter 2022 Results Summary
                                                                                

 Three Months Ended December 31, Year Ended December 31,
  2022   2021  Change
(%)
  2022   2021  Change
(%)
 (in thousands, except per unit and per share amounts)
Revenue$65,569  $196,216  (67)% $670,753  $636,869  5%
Gross profit 2,256   12,141  (81)%  25,333   48,788  (48)%
Adjusted gross profit 2,622   12,567  (79)%  35,774   50,092  (29)%
Net loss 13,014   (54,463) (124)%  (172,042)  (166,268) 3%
Net income (loss) per share, basic 1.26   (6.96) (118)%  (19.91)  (21.29) (6)%
Net income (loss) per share, diluted 1.25   (6.96) (118)%  (19.91)  (21.29) (6)%
Adjusted EBITDA loss (25,538)  (43,691) (42)%  (138,956)  (137,575) 1%
            
Gross profit per unit$895  $1,885  (53)% $1,208  $2,098  (42)%
Adjusted gross profit per unit$1,041  $1,951  (47)% $1,707  $2,154  (21)%
Average selling price per retail unit$22,849  $25,384  (10)% $26,503  $23,155  14%
Retail units sold 2,520   6,441  (61)%  20,961   23,251  (10)%

Share and per-share amounts have been adjusted to give effect to the Company’s 10 for 1 reverse stock split effective March 8, 2023

Conference Call Information

Shift senior management will host a conference call today to discuss the Company’s Q4'22 financial results. This call is scheduled to begin at 2:00 pm PT / 5:00 pm ET and can be accessed by dialing (833) 634-1255 or (412) 317-6015. To listen to a live audio webcast, please visit Shift’s Investor Relations website at investors.shift.com. A telephonic replay of the conference call will be available until Tuesday, April 4, 2023, and can be accessed by dialing (877) 344-7529 or (412) 317-0088 and entering the passcode 2098340.

About Shift

Shift is a consumer-centric omnichannel retailer transforming the used car industry by leveraging its end-to-end ecommerce platform and retail locations to provide a technology-driven, hassle-free customer experience. Shift’s mission is to make car purchase and ownership simple — to make buying or selling a used car fun, fair, and accessible to everyone. Shift provides comprehensive, digital solutions throughout the car ownership lifecycle: finding the right car, a seamless digitally-driven purchase transaction including financing and vehicle protection products, an efficient, digital trade-in/sale transaction, and a vision to provide high-value support services during car ownership. For more information, visit www.shift.com. The contents of our website are not incorporated into this press release.

Forward-Looking Statements

This document includes “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward looking statements include estimated financial information. Such forward looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of Shift’s business are based on current expectations that are subject to risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward looking statements. These factors include, but are not limited to: (1) Shift’s ability to sustain its current growth, which may be affected by, among other things, competition, Shift’s ability to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (2) changes in applicable laws or regulations; (3) the possibility that Shift may be adversely affected by other economic, business, and/or competitive factors; (4) the operational and financial outlook of Shift; (5) the ability for Shift to execute its growth strategy; (6) Shift’s ability to purchase sufficient quantities of vehicles at attractive prices; (7) legislative, regulatory and economic developments and (8) other risks and uncertainties indicated from time to time in other documents filed or to be filed with the SEC by Shift. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Shift undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Key Operating Metrics

Retail Units Sold

We define retail units sold as the number of vehicles sold to customers in a given period, net of returns. We currently have a seven-day, 200 mile return policy. The number of retail units sold is the primary driver of our revenues and, indirectly, gross profit, since retail unit sales enable multiple complementary revenue streams, including all financing and protection products. We view retail units sold as a key measure of our growth, as growth in this metric is an indicator of our ability to successfully scale our operations while maintaining product integrity and customer satisfaction.

Wholesale Units Sold

We define wholesale units sold as the number of vehicles sold through wholesale channels in a given period. While wholesale units are not the primary driver of revenue or gross profit, wholesale is a valuable channel as it allows us to be able to purchase vehicles regardless of condition, which is important for the purpose of accepting a trade-in from a customer making a vehicle purchase from us, and as an online destination for consumers to sell their cars even if not selling us a car that meets our retail standards.

Retail Average Sale Price

We define retail average sale price (“ASP”) as the average price paid by a customer for an retail vehicle, calculated as retail revenue divided by retail units. Retail average sale price helps us gauge market demand in real-time and allows us to maintain a range of inventory that most accurately reflects the overall price spectrum of used vehicle sales in the market.

Wholesale Average Sale Price

We define wholesale average sale price as the average price paid by a customer for a wholesale vehicle, calculated as wholesale revenue divided by wholesale units. We believe this metric provides transparency and is comparable to our peers.

Average Monthly Unique Visitors

We define a monthly unique visitor as an individual who has visited our website within a calendar month, based on data collected on our website. We calculate average monthly unique visitors as the sum of monthly unique visitors in a given period, divided by the number of months in that period. To classify whether a visitor is “unique”, we dedupe (a technique for eliminating duplicate copies of repeating data) each visitor based on email address and phone number, if available, and if not, we use the anonymous ID which lives in each user’s internet cookies. This practice ensures that we do not double-count individuals who visit our website multiple times within any given month. We view average monthly unique visitors as a key indicator of the strength of our brand, the effectiveness of our advertising and merchandising campaigns and consumer awareness.

Average Days to Sale

We define average days to sale as the number of days between Shift’s acquisition of a vehicle and sale of that vehicle to a customer, averaged across all retail units sold in a period. We view average days to sale as a useful metric in understanding the health of our inventory.

Retail Vehicles Available for Sale

We define retail vehicles available for sale as the number of retail vehicles in inventory on the last day of a given reporting period. Until we reach an optimal pooled inventory level, we view retail vehicles available for sale as a key measure of our growth. Growth in retail vehicles available for sale increases the selection of vehicles available to consumers, which we believe will allow us to increase the number of vehicles we sell. Moreover, growth in retail vehicles available for sale is an indicator of our ability to scale our vehicle purchasing, inspection and reconditioning operations.

Explanation Of Non-GAAP Measures

In addition to our GAAP results, we review certain non-GAAP financial measures to help us evaluate our business, measure our performance, identify trends affecting our business, establish budgets, measure the effectiveness of investments in our technology and sales and marketing, and assess our operational efficiencies. These non-GAAP measures include Adjusted Gross Profit, Adjusted gross profit per unit (“Adjusted GPU”), and Adjusted EBITDA, each of which is discussed below.

These non-GAAP financial measures are not intended to be considered in isolation from, as substitutes for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. You are encouraged to evaluate these adjustments, and review the reconciliation of these non-GAAP financial measures to their most comparable GAAP measures, and the reasons we consider them appropriate. It is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies. See “Reconciliation of gross profit to Adjusted Gross Profit,” “Reconciliation of gross profit per unit to Adjusted gross profit per unit” and “Reconciliation of net loss to Adjusted EBITDA” included as part of this shareholder letter.

Adjusted Gross Profit

Management evaluates our business based on an adjusted gross profit calculation that removes the financial impact associated with milestones achieved under our Lithia warrant arrangement and depreciation related to reconditioning facilities that is included in cost of sales. These items resulted in reductions in gross profit in our consolidated financial statements as applicable to the periods presented. These are non-cash adjustments, and we do not expect any material future non-cash gross profit adjustments related to the Lithia warrant agreement. We also excluded non-recurring losses incurred to liquidate inventories as part of the Project Focus Restructuring Plan. We examine adjusted gross profit in aggregate as well as for each of our revenue streams: retail, other, and wholesale.

Adjusted Gross Profit per Unit

We define adjusted gross profit per unit (“Adjusted GPU”) as the adjusted gross profit for retail, other and wholesale, each of which divided by the total number of retail units sold in the period. Adjusted GPU is driven by retail vehicle revenue, which generates additional revenue through attachment of our financing and protection products, and gross profit generated from wholesale vehicle sales. We present Adjusted GPU from our three revenues streams, as Retail Adjusted GPU, Wholesale Adjusted GPU and Other Adjusted GPU. We believe Adjusted GPU is a key measure of our growth and long-term profitability.

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA as net loss adjusted to exclude stock-based compensation expense, depreciation and amortization, net interest income or expense, impact of warrant remeasurement, warrant milestone impact, and other cash and non-cash based income or expenses that we do not consider indicative of our core operating performance. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. We believe Adjusted EBITDA is useful to investors in evaluating our performance for the following reasons:

  • Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s performance without regard to items such as those we exclude in calculating this measure, which can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired.
  • Our management uses Adjusted EBITDA in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our business strategies, and in communications with our board of directors concerning our performance.
  • Adjusted EBITDA provides a measure of consistency and comparability with our past performance that many investors find useful, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results of operations as reported under GAAP. These limitations include but are not limited to:

  • Stock-based compensation is a non-cash charge and will remain an element of our long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period.
  • Depreciation and amortization are non-cash charges, and the assets being depreciated or amortized will often have to be replaced in the future, but Adjusted EBITDA does not reflect any cash requirements for these replacements.
  • Change in fair value of financial instruments is a non-cash gain or loss. Liability-classified financial instruments represent potential future obligations to settle liabilities by issuing the Company’s common stock. Adjusted EBITDA does not reflect changes in the fair value of these obligations.
  • Adjusted EBITDA does not reflect changes in our working capital needs, capital expenditures, or contractual commitments.
  • Adjusted EBITDA does not reflect cash requirements for income taxes and the cash impact of other income or expense.
  • Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Our Adjusted EBITDA is influenced by fluctuations in our revenue and the timing and amounts of our investments in our operations. Adjusted EBITDA should not be considered as an alternative to net income (loss), income (loss) from operations, or any other measure of financial performance calculated and presented in accordance with GAAP.

Adjusted Selling, General and Administrative Expenses

We define Adjusted selling, general and administrative expenses (“Adjusted SG&A”) as Selling, General and Administrative Expenses (“SG&A”) adjusted to exclude those SG&A items that are excluded from Adjusted EBITDA. These items included but are not limited to stock-based compensation expense, transaction costs, and other cash and non-cash based expenses that we do not consider indicative of our core operating performance. We believe Adjusted SG&A is useful to investors in evaluating our performance for the following reasons:

  • Adjusted SG&A is widely used by investors and securities analysts to measure a company’s performance without regard to items such as those we exclude in calculating this measure, which can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired.
  • Our management uses Adjusted SG&A in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of performance and the effectiveness of our business strategies, and in communications with our board of directors concerning our performance.
  • Adjusted SG&A provides a measure of consistency and comparability with our past performance that many investors find useful, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Although Adjusted SG&A is frequently used by investors and securities analysts in their evaluations of companies, Adjusted SG&A has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results of operations as reported under GAAP. These limitations include but are not limited to:

  • Stock-based compensation is a non-cash charge and will remain an element of our long-term incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period.
  • Adjusted SG&A does not reflect changes in our working capital needs, capital expenditures, or contractual commitments.
  • Other companies may calculate Adjusted SG&A differently than we do, limiting its usefulness as a comparative measure.

Our Adjusted SG&A is influenced by fluctuations in the timing and amounts of our investments in our operations. Adjusted SG&A should not be considered as an alternative to SG&A or any other measure of financial performance calculated and presented in accordance with GAAP.

Investor Relations Contact:
IR@shift.com

Media Contact:
press@shift.com

Source: Shift Technologies, Inc.



SHIFT TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)

 As of December 31, 2022 As of December 31, 2021
ASSETS   
Current assets:   
Cash and cash equivalents$96,159  $182,616 
Restricted cash, current 10,632    
Marketable securities at fair value 1,264    
Accounts receivable, net of allowance for doubtful accounts of $93 and $304 4,558   20,084 
Inventory 40,925   122,743 
Prepaid expenses and other current assets 7,657   7,392 
Operating and finance lease assets, property and equipment, accounts receivable, and other assets held for sale 17,226    
Total current assets 178,421   332,835 
Restricted cash, non-current 1,055   11,725 
Marketable securities at fair value, non-current 707    
Property and equipment, net 6,797   7,940 
Operating lease assets 44,568    
Finance lease assets, net 152    
Capitalized website and internal use software costs, net 10,657   9,262 
Goodwill 2,070    
Deferred borrowing costs 268   564 
Other non-current assets 3,323   3,414 
Total assets$248,018  $365,740 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)   
Current liabilities:   
Accounts payable$12,085  $15,175 
Accrued expenses and other current liabilities 33,872   43,944 
Operating lease liabilities, current 8,865    
Finance lease liabilities, current 271    
Operating and finance lease liabilities and other liabilities associated with assets held for sale 15,432    
Flooring line of credit 24,831   83,252 
Total current liabilities 95,356   142,371 
Long-term debt, net 163,363   144,335 
Operating lease liabilities, non-current 44,985    
Finance lease liabilities, non-current 3,989    
Other non-current liabilities 111   3,762 
Total liabilities 307,804   290,468 
    
Stockholders’ equity (deficit):   
Preferred stock – par value $0.0001 per share; 1,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively     
Common stock – par value $0.0001 per share; 500,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively; 17,212,130 and 8,136,931 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively 2   1 
Additional paid-in capital 552,968   515,982 
Accumulated other comprehensive loss (3)   
Accumulated deficit (612,753)  (440,711)
Total stockholders’ equity (deficit) (59,786)  75,272 
Total liabilities and stockholders’ equity (deficit)$248,018  $365,740 

Share and per-share amounts have been adjusted to give effect to the Company’s 10 for 1 reverse stock split effective March 8, 2023


SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)

 Three Months Ended
December 31,
 Year Ended
December 31,
  2022   2021   2022   2021 
Revenue       
Retail revenue, net$57,579  $163,498  $555,523  $538,387 
Other revenue, net 3,201   7,324   27,007   22,633 
Wholesale vehicle revenue 4,789   25,394   88,223   75,849 
Total revenue 65,569   196,216   670,753   636,869 
Cost of sales 63,313   184,075   645,420   588,081 
Gross profit 2,256   12,141   25,333   48,788 
Operating expenses:       
Selling, general and administrative expenses 41,940   63,791   214,008   220,055 
Depreciation and amortization 3,359   1,549   10,456   5,586 
Restructuring expenses 334      21,001    
Loss on impairment 17,319      17,319    
Total operating expenses 62,952   65,340   262,784   225,641 
Loss from operations (60,696)  (53,199)  (237,451)  (176,853)
Change in fair value of financial instruments    1,302      18,893 
Gain on bargain purchase 76,685      76,685    
Interest and other expense, net (2,734)  (2,340)  (10,950)  (8,082)
Net income (loss) before income taxes 13,255   (54,237)  (171,716)  (166,042)
Provision for income taxes 241   226   326   226 
Net income (loss) attributable to common stockholders$13,014  $(54,463) $(172,042) $(166,268)
Net income (loss) per share attributable to common stockholders, basic$1.26  $(6.96) $(19.91) $(21.29)
Net income (loss) per share attributable to common stockholders, diluted$1.25  $(6.96) $(19.91) $(21.29)
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders, basic 10,317,221   7,825,876   8,641,922   7,811,414 
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders, diluted 12,124,578   7,825,876   8,641,922   7,811,414 

Share and per-share amounts have been adjusted to give effect to the Company’s 10 for 1 reverse stock split effective March 8, 2023


SHIFT TECHNOLOGIES INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 Year Ended
December 31,
  2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES   
Net loss$(172,042) $(166,268)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 11,787   6,253 
Stock-based compensation expense 13,029   25,130 
Unrealized losses on equity securities 24    
Gain on bargain purchase (76,685)   
Change in fair value of financial instruments    (18,893)
Amortization of operating lease right-of-use assets 10,496    
Contra-revenue associated with milestones 637   637 
Amortization of debt discounts 2,011   2,741 
Non-cash impairment and restructuring expenses 30,692    
Changes in operating assets and liabilities:   
Accounts receivable 18,158   (11,658)
Inventory 88,409   (73,657)
Prepaid expenses and other current assets (203)  (1,914)
Other non-current assets 767   (1,186)
Accounts payable (4,352)  4,359 
Accrued expenses and other current liabilities (19,020)  22,375 
Operating lease liabilities (10,770)   
Other non-current liabilities (3,354)  1,035 
Net cash, cash equivalents, and restricted cash used in operating activities (110,416)  (211,046)
    
CASH FLOWS FROM INVESTING ACTIVITIES   
Purchases of property and equipment (4,665)  (7,524)
Proceeds from sale of property and equipment 317    
Purchases of marketable securities (67)   
Proceeds from sales of marketable securities 115    
Capitalized website internal-use software costs (10,368)  (6,619)
Cash received from acquisition of CarLotz, Inc. 95,663    
Cash paid for acquisition of Fair Dealer Services, LLC (15,000)   
Net cash, cash equivalents, and restricted cash provided by (used in) investing activities 65,995   (14,143)
    
CASH FLOWS FROM FINANCING ACTIVITIES   
Proceeds from flooring line of credit facility 382,090   329,981 
Repayment of flooring line of credit facility (440,511)  (261,217)
Exchange of warrants for cash    (497)
Proceeds from Senior Unsecured Notes, net of discounts 19,591    
Payment of debt issuance costs (175)  (88)
Proceeds from issuance of convertible notes    143,768 
Premiums paid for Capped Call Transactions    (28,391)
Principal payments on finance leases (127)   
Proceeds from stock option exercises, including from early exercised options    506 
Payment of tax withheld for common stock issued under stock-based compensation plans (2,861)   
Repurchase of shares related to early exercised options (81)  (73)
Net cash, cash equivalents, and restricted cash provided by (used in) financing activities (42,074)  183,989 
Net decrease in cash, cash equivalents and restricted cash (86,495)  (41,200)
Cash, cash equivalents and restricted cash, beginning of period 194,341   235,541 
Cash, cash equivalents and restricted cash, end of period$107,846  $194,341 



SHIFT TECHNOLOGIES, INC. AND SUBSIDIARIES

Key Operating Metrics
(unaudited)

 Three Months Ended December 31, Year Ended December 31,
  2022   2021  2022   2021
Units:       
Retail units 2,520   6,441  20,961   23,251
Wholesale units 354   1,972  5,344   7,067
Total units sold 2,874   8,413  26,305   30,318
        
Retail ASP$22,849  $25,384 $26,503  $23,155
Wholesale ASP$13,528  $12,877 $16,509  $10,733
        
Gross Profit per Unit       
Retail gross profit per unit$203  $572 $409  $1,087
Other gross profit per unit 1,270   1,137  1,288   973
Wholesale gross profit per unit (578)  176  (489)  38
Total gross profit per unit$895  $1,885 $1,208  $2,098
        
Average monthly unique visitors 531,592   829,845  735,824   659,358
Average days to sale 80   57  69   54
Retail vehicles available for sale 1,476   4,337  1,476   4,337



SHIFT TECHNOLOGIES, INC. AND SUBSIDIARIES

Reconciliation of Gross Profit to Adjusted Gross Profit
(In thousands)
(unaudited)

 Three Months Ended
December 31,
 Year Ended
December 31,
  2022   2021  2022   2021
Total gross profit:       
GAAP total gross profit$2,256  $12,141 $25,333  $48,788
Warrant impact adjustment (1) 159   159  637   637
Restructuring - Inventory liquidation (2) 53     8,598   
Depreciation in cost of sales (3) 154   267  1,206   667
Adjusted total gross profit$2,622  $12,567 $35,774  $50,092
        
Retail gross profit:       
GAAP retail gross profit$512  $3,683 $8,583  $25,263
Warrant impact adjustment (1)         
Restructuring - Inventory liquidation (2) 53     8,598   
Depreciation in cost of sales (3) 154   267  1,206   667
Adjusted retail gross profit$719  $3,950 $18,387  $25,930
        
Other gross profit:       
GAAP other gross profit$3,201  $7,324 $27,007  $22,633
Warrant impact adjustment (1) 159   159  637   637
Restructuring - Inventory liquidation (2)         
Depreciation in cost of sales (3)         
Adjusted other gross profit$3,360  $7,483 $27,644  $23,270
        
Wholesale gross profit:       
GAAP wholesale gross profit$(1,457) $1,134 $(10,257) $892
Warrant impact adjustment (1)         
Restructuring - Inventory liquidation (2)         
Depreciation in cost of sales (3)         
Adjusted wholesale gross profit (loss)$(1,457) $1,134 $(10,257) $892

(1)   Includes non-cash charges related to the Lithia warrants and recorded as contra-revenue on the consolidated statements of operations and comprehensive loss.

(2)   Includes non-recurring losses on inventory liquidation incurred as part of the previously announced Restructuring Plan.

(3)   Includes depreciation expense attributed to reconditioning facilities included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

SHIFT TECHNOLOGIES, INC. AND SUBSIDIARIES
Reconciliation of Gross Profit Per Unit To Adjusted Gross Profit Per Unit
(unaudited)

 Three Months Ended
December 31,
 Year Ended
December 31,
  2022   2021  2022   2021
Total gross profit per unit:       
GAAP total gross profit per unit$895  $1,885 $1,208  $2,098
Warrant impact adjustment per unit (1) 64   25  31   28
Restructuring - Inventory liquidation (2) 21     410   
Depreciation adjustment per unit (3) 61   41  58   28
Adjusted total gross profit per unit$1,041  $1,951 $1,707  $2,154
        
Retail gross profit per unit:       
GAAP retail gross profit per unit$203  $572 $409  $1,087
Warrant impact adjustment per unit (1)         
Restructuring - Inventory liquidation (2) 21     410   
Depreciation adjustment per unit (3) 61   41  58   28
Adjusted retail gross profit per unit$285  $613 $877  $1,115
        
Other gross profit per unit:       
GAAP other gross profit per unit$1,270  $1,137 $1,288  $973
Warrant impact adjustment per unit (1) 64   25  31   28
Restructuring - Inventory liquidation (2)         
Depreciation adjustment per unit (3)         
Adjusted other gross profit per unit$1,334  $1,162 $1,319  $1,001
        
Wholesale gross profit per unit:       
GAAP wholesale gross profit per unit$(578) $176 $(489) $38
Warrant impact adjustment per unit (1)         
Restructuring - Inventory liquidation (2)         
Depreciation adjustment per unit (3)         
Adjusted wholesale gross profit (loss) per unit$(578) $176 $(489) $38

(1)   Includes non-cash charges related to the Lithia warrants and recorded as contra-revenue on the consolidated statements of operations and comprehensive loss.

(2)   Includes non-recurring losses on inventory liquidation incurred as part of the previously announced Restructuring Plan.

(3)   Includes depreciation expense attributed to reconditioning facilities included in cost of sales on the condensed consolidated statements of operations and comprehensive loss.

SHIFT TECHNOLOGIES, INC. AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA
(In thousands)
(unaudited)

 Three Months Ended
December 31,
 Year Ended
December 31,
Adjusted EBITDA Reconciliation 2022   2021   2022   2021 
Net Loss$13,014  $(54,463) $(172,042) $(166,268)
(+) Interest and other expense, net 2,734   2,340   10,950   8,082 
(+) Stock-based compensation (270)  6,182   13,029   25,130 
(+) Change in fair value of financial instruments    (1,302)     (18,893)
(+) Depreciation & amortization 3,513   1,816   11,662   6,253 
(+) Warrant impact adjustment - contra-revenue (1) 159   159   637   637 
(+) Merger and acquisition transaction costs (2) 12,557   141   19,972   141 
(+) Costs related to closed locations excluding severance (3) 1,956      11,857    
(+) Sales tax penalty accrual (recovery) (1,218)  521   (2,149)  5,951 
(+) At-the-market sales agreement costs       266    
(+) Provision for income taxes 241   226   326   226 
(+) Severance, retention, and CEO costs (4) 1,104   689   8,455   1,166 
(+) Restructuring costs from inventory, property and equipment, and capitalized internal-use software (5) 38      17,447    
(+) Impairment expense 17,319      17,319    
(+) Bargain purchase gain (76,685)     (76,685)   
Adjusted EBITDA$(25,538) $(43,691) $(138,956) $(137,575)
EBITDA Margin (%)(38.9)% (22.3)% (20.7)% (21.6)%

(1) Includes non-cash charges related to the Lithia warrants and recorded as contra-revenue on the consolidated statements of operations and comprehensive loss.
(2) Includes transaction costs for the Fair acquisition in the second quarter and the CarLotz merger in the third and fourth quarters.
(3) Includes non-cash lease charges related to the closure of the Company’s facilities in Miami and Las Vegas. Includes termination fees and non-cash lease expense related to leases of closing hubs due to the Restructuring Plan. Includes fulfillment, lease, payroll, facilities, and other operating expenses related to the process of closing various hubs due to the Restructuring Plan.
(4) Includes severance amounts related to the Restructuring Plan and the CEO transition.
(5) Includes net losses on inventory liquidated as part of the previously announced Restructuring Plan. Includes losses on property sold or disposed from closing hubs due to the Restructuring Plan. Includes non-cash charges related to the early decommissioning of capitalized internal use software costs due to changes in business strategy arising from the Restructuring Plan.

SHIFT TECHNOLOGIES, INC. AND SUBSIDIARIES
Reconciliation of Selling, General and Administrative Expenses to Adjusted Selling, General and Administrative Expenses
(In thousands)
(unaudited)

 Three Months Ended
December 31,
 Year Ended
December 31,
Adjusted Selling, General and Administrative Expenses Reconciliation 2022   2021   2022   2021 
Selling, general and administrative expenses$41,940  $63,791  $214,008  $220,055 
(-) Stock-based compensation 270   (6,182)  (13,029)  (25,130)
(-) Merger and acquisition transaction costs (12,557)  (141)  (19,972)  (141)
(-) Facility closure costs (1) (1,653)     (3,419)   
(-) Sales tax penalty accrual (recovery) 1,218   (521)  2,149   (5,951)
(-) At-the-market sales agreement costs       (266)   
(-) Severance and transaction bonuses (2) (1,101)  (689)  (4,784)  (1,166)
Adjusted selling, general and administrative expenses$28,117  $56,258  $174,687  $187,667 

(1) Included in Costs related to closed locations excluding severance in the Adjusted EBITDA Reconciliation table above.
(2) Included in Severance, retention, and CEO costs in the Adjusted EBITDA Reconciliation table above.

 


FAQ

What were Shift Technologies' revenue results for Q4 2022?

Shift Technologies reported $65.6 million in revenue for the fourth quarter of 2022.

What is the adjusted GPU forecast for Q1 2023 for Shift Technologies?

Shift Technologies expects adjusted GPU to be between $1,600 and $1,800 for the first quarter of 2023.

Did Shift Technologies regain compliance with Nasdaq requirements?

Yes, Shift Technologies regained compliance with Nasdaq's minimum bid price requirement as of March 22, 2023.

How many retail units did Shift Technologies sell in Q4 2022?

Shift Technologies sold 2,520 retail units in the fourth quarter of 2022.

What is the outlook for Shift Technologies' revenue in the first quarter of 2023?

The outlook for Shift Technologies' revenue in Q1 2023 is between $56 million and $58 million.

Shift Technologies Inc

NASDAQ:SFT

SFT Rankings

SFT Latest News

SFT Stock Data

New Car Dealers
Retail Trade
Link
US
Philadelphia