Successfully Completed UACC Securitization
Transaction in April 2024 Continued Progress on UACC
Origination Performance
Vroom, Inc. (Nasdaq:VRM) today announced financial results for
the first quarter ended March 31, 2024.
HIGHLIGHTS OF FIRST QUARTER 2024
- $91.0 million cash and cash equivalents as of March 31,
2024
- $(44.7) million net loss from continuing operations
- $(32.2) million Adjusted EBITDA
- Substantially completed the ecommerce wind-down
- Adopted new reporting segments to align with continuing
operations at United Auto Credit (UACC) and CarStory
Tom Shortt, the Company’s Chief Executive Officer, said “As we
previously announced, our ecommerce wind-down was substantially
completed during the first quarter of 2024. I am extremely proud of
our team’s timely and orderly execution of the wind-down and
continued focus on strengthening UACC’s operations. We have focused
on portfolio performance at UACC and currently expect originations
since early 2023 to perform at a level that enables UACC to drive
toward profitability. We continue to take other actions to maximize
stakeholder value by seeking to monetize our ecommerce platform and
grow and enhance the profitability of UACC and CarStory.”
Bob Krakowiak, Vroom’s Chief Financial Officer, commented, “We
ended the quarter with cash and cash equivalents of approximately
$91 million. The cash burn was primarily a result of the ecommerce
wind-down, as we paid severance and other personnel-related costs
and incurred exit costs associated with early termination or
modification of ecommerce contracts and leases. I am pleased with
the completion of UACC’s 2024-1 securitization transaction, in
which $262.5 million of rated asset-backed securities were sold in
April 2024, and $37.5 million of non-investment grade securities
initially retained were subsequently sold in early May 2024.”
FIRST QUARTER 2024 FINANCIAL DISCUSSION
All financial comparisons are on a year-over-year basis unless
otherwise noted.
Three Months Ended March
31,
2024
2023
$ Change
% Change
Interest income
$
51,077
$
34,368
$
16,709
48.6
%
Interest expense:
Warehouse credit facility
9,471
3,099
6,372
205.6
%
Securitization debt
4,869
4,345
524
12.1
%
Total interest expense
14,340
7,444
6,897
92.6
%
Net interest income
36,737
26,924
9,812
36.4
%
Realized and unrealized losses, net of
recoveries
30,819
15,728
15,091
95.9
%
Net interest income after losses and
recoveries
5,918
11,196
(5,279
)
(47.1
)%
Noninterest (loss) income:
Servicing income
2,019
2,854
(835
)
(29.3
)%
Warranties and GAP income, net
(9,642
)
2,835
(12,477
)
(440.1
)%
CarStory revenue
2,979
3,170
(191
)
(6.0
)%
Gain on debt extinguishment
—
8,709
(8,709
)
(100.0
)%
Other income
2,784
3,032
(248
)
(8.2
)%
Total noninterest (loss) income
(1,860
)
20,600
(22,460
)
(109.0
)%
Expenses:
Compensation and benefits
24,110
23,221
889
3.8
%
Professional fees
3,343
4,973
(1,630
)
(32.8
)%
Software and IT costs
4,622
5,246
(624
)
(11.9
)%
Depreciation and amortization
7,626
7,232
394
5.4
%
Interest expense on corporate debt
1,391
1,340
51
3.8
%
Impairment charges
2,752
—
2,752
100.0
%
Other expenses
4,454
5,199
(745
)
(14.3
)%
Total expenses
48,298
47,211
1,087
2.3
%
Loss from continuing operations before
provision for income taxes
(44,240
)
(15,415
)
(28,825
)
187.0
%
Provision for income taxes from continuing
operations
436
54
382
707.4
%
Net loss from continuing operations
$
(44,676
)
$
(15,469
)
$
(29,207
)
188.8
%
Net loss from discontinued operations
$
(22,941
)
$
(59,272
)
$
36,331
61.3
%
Net loss
$
(67,617
)
$
(74,741
)
$
7,124
9.5
%
Results by Segment
UACC
Three Months Ended March
31,
2024
2023
Change
% Change
(in thousands, except unit
data and average days to sale)
Interest income
$
51,541
$
35,299
$
16,242
46.0
%
Interest expense:
Warehouse credit facility
9,471
3,099
6,372
205.6
%
Securitization debt
4,869
4,345
524
12.1
%
Total interest expense
14,340
7,444
6,896
92.6
%
Net interest income
37,201
27,855
9,346
33.6
%
Realized and unrealized losses, net of
recoveries
27,761
12,272
15,489
126.2
%
Net interest income after losses and
recoveries
9,439
15,582
(6,143
)
(39.4
)%
Noninterest income:
Servicing income
2,019
2,854
(835
)
(29.3
)%
Warranties and GAP income, net
1,610
2,203
(593
)
(26.9
)%
Other income
2,470
1,054
1,416
134.3
%
Total noninterest income
6,099
6,111
(12
)
(0.2
)%
Expenses:
Compensation and benefits
18,788
18,537
252
1.4
%
Professional fees
876
2,541
(1,664
)
(65.5
)%
Software and IT costs
3,097
2,705
392
14.5
%
Depreciation and amortization
6,021
5,627
394
7.0
%
Interest expense on corporate debt
471
197
274
139.1
%
Impairment charges
2,752
—
2,752
100.0
%
Other expenses
2,523
2,420
103
4.3
%
Total expenses
34,529
32,026
2,503
7.8
%
Adjusted EBITDA
$
(10,147
)
$
(4,467
)
$
(5,680
)
127.1
%
Interest income on cash and cash
equivalents
$
(568
)
$
(448
)
(120
)
26.7
%
Stock compensation expense
$
168
$
490
(322
)
(65.8
)%
CarStory
Three Months Ended March
31,
2024
2023
Change
% Change
(in thousands, except unit
data and average days to sale)
Noninterest income:
CarStory revenue
$
2,979
$
3,170
$
(191
)
(6.0
)%
Other income
173
48
125
260.4
%
Total noninterest income
3,152
3,218
(66
)
(2.1
)%
Expenses:
Compensation and benefits
2,214
2,401
(187
)
(7.8
)%
Professional fees
122
177
(55
)
(31.1
)%
Software and IT costs
167
174
(7
)
(4.0
)%
Depreciation and amortization
1,605
1,605
-
0.0
%
Other expenses
118
149
(31
)
(20.8
)%
Total expenses
4,225
4,505
(280
)
(6.2
)%
Adjusted EBITDA
$
559
$
567
$
(8
)
(1.4
)%
Interest income on cash and cash
equivalents
$
(173
)
$
(46
)
(126
)
272.1
%
Stock compensation expense
$
200
$
296
(95
)
(32.3
)%
Corporate
Three Months Ended March
31,
2024
2023
Change
% Change
(in thousands, except unit
data and average days to sale)
Interest income
$
(464
)
$
(931
)
$
467
50.2
%
Realized and unrealized losses, net of
recoveries
3,058
3,456
(398
)
(11.5
)%
Net interest income after losses and
recoveries
(3,521
)
(4,387
)
865
19.7
%
Noninterest (loss) income:
Warranties and GAP income, net
$
(11,252
)
$
632
$
(11,884
)
(1,880.4
)%
Gain on debt extinguishment
—
8,709
(8,709
)
(100.0
)%
Other income
141
1,930
(1,789
)
(92.7
)%
Total noninterest (loss) income
(11,111
)
11,271
(22,382
)
(198.6
)%
Expenses:
Compensation and benefits
3,109
2,284
824
36.1
%
Professional fees
2,345
2,256
89
3.9
%
Software and IT costs
1,358
2,366
(1,009
)
(42.6
)%
Interest expense on corporate debt
920
1,143
(223
)
(19.5
)%
Other expenses
1,813
2,631
(819
)
(31.1
)%
Total expenses
9,544
10,681
(1,137
)
(10.6
)%
Adjusted EBITDA
$
(22,564
)
$
(12,398
)
$
(10,166
)
82.0
%
Interest income on cash and cash
equivalents
$
(264
)
$
(1,930
)
1,666
86.3
%
Stock compensation expense
$
956
$
894
63
7.0
%
Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S.
GAAP, we believe the following non-GAAP financial measures are
useful in evaluating our operating performance: EBITDA and Adjusted
EBITDA. These non-GAAP financial measures have limitations as
analytical tools in that they do not reflect all of the amounts
associated with our results of operations as determined in
accordance with U.S. GAAP. Because of these limitations, these
non-GAAP financial measures should be considered along with other
operating and financial performance measures presented in
accordance with U.S. GAAP. The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or
as a substitute for, or superior to, financial information prepared
and presented in accordance with U.S. GAAP. We have reconciled all
non-GAAP financial measures with the most directly comparable U.S.
GAAP financial measures.
EBITDA and Adjusted EBITDA are supplemental performance measures
that our management uses to assess our operating performance and
the operating leverage in our business. Because EBITDA and Adjusted
EBITDA facilitate internal comparisons of our historical operating
performance on a more consistent basis, we use these measures for
business planning purposes.
EBITDA and Adjusted EBITDA
We calculate EBITDA as net loss before interest expense on
corporate debt, interest income on cash and cash equivalents,
income tax expense and depreciation and amortization expense.
We calculate Adjusted EBITDA as EBITDA adjusted to exclude stock
compensation expense, gain on debt extinguishment and long-lived
asset impairment charges.
The following table presents a reconciliation of EBITDA and
Adjusted EBITDA to net loss, which is the most directly comparable
U.S. GAAP measure:
Three Months Ended March
31,
2024
2023
(in thousands)
Net loss from continuing operations
$
(44,676
)
$
(15,469
)
Adjusted to exclude the following:
Interest expense on corporate debt
1,391
1,340
Interest income on cash and cash
equivalents
(1,005
)
(2,425
)
Provision for income taxes
436
54
Depreciation and amortization
7,626
7,232
EBITDA
$
(36,228
)
$
(9,268
)
Stock compensation expense
1,324
1,679
Gain on debt extinguishment
—
(8,709
)
Impairment charges
2,752
—
Adjusted EBITDA
$
(32,152
)
$
(16,298
)
About Vroom (Nasdaq: VRM)
Vroom owns and operates United Auto Credit Corporation (UACC), a
leading indirect automotive lender serving the independent and
franchise dealer market nationwide, and CarStory, a leader in
AI-powered analytics and digital services for automotive retail.
During fiscal 2023, Vroom also operated an end-to-end ecommerce
platform to buy and sell used vehicles. Pursuant to its previously
announced Value Maximization Plan, Vroom discontinued its ecommerce
operations and used vehicle dealership business.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding the potential impacts of the execution of and the
expected benefits and cost-savings, if any, from our Value
Maximization Plan, including the completion of the wind-down of the
ecommerce business, our expectations regarding United Auto Credit
Corporation and CarStory, the impact from the UACC’s 2024-1
securitization transaction, and future results of operations and
financial position, including our liquidity outlook for 2024. These
statements are based on management’s current assumptions and are
neither promises nor guarantees, but involve known and unknown
risks, uncertainties and other important factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. For factors
that could cause actual results to differ materially from the
forward-looking statements in this press release, please see the
risks and uncertainties identified under the heading "Risk Factors"
in our Annual Report on Form 10-K for the year ended December 31,
2023, as updated by our Quarterly report on Form 10-Q for the
quarter ended March 31, 2023, which is available on our Investor
Relations website at ir.vroom.com and on the SEC website at
www.sec.gov. All forward-looking statements reflect our beliefs and
assumptions only as of the date of this press release. We undertake
no obligation to update forward-looking statements to reflect
future events or circumstances.
VROOM, INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
and per share amounts)
(unaudited)
As of March 31,
As of December 31,
2024
2023
ASSETS
Cash and cash equivalents
$
90,990
$
135,585
Restricted cash (including restricted cash
of consolidated VIEs of $48.1 million and $49.1 million,
respectively)
49,516
73,234
Finance receivables at fair value
(including finance receivables of consolidated VIEs of $381.3
million and $341.4 million, respectively)
421,279
348,670
Finance receivables held for sale, net
(including finance receivables of consolidated VIEs of $450.0
million and $457.2 million, respectively)
454,189
503,546
Interest receivable (including interest
receivables of consolidated VIEs of $13.4 million and $13.7
million, respectively)
14,142
14,484
Property and equipment, net
2,414
4,982
Intangible assets, net
125,136
131,892
Operating lease right-of-use assets
6,751
7,063
Other assets (including other assets of
consolidated VIEs of $11.4 million and $13.3 million,
respectively)
39,708
59,429
Assets from discontinued operations
18,142
196,537
Total assets
$
1,222,267
$
1,475,422
LIABILITIES AND STOCKHOLDERS’
EQUITY
Warehouse credit facilities of
consolidated VIEs
$
516,276
$
421,268
Long-term debt (including securitization
debt of consolidated VIEs of $238.0 million and $314.1 million at
fair value, respectively)
548,142
626,583
Operating lease liabilities
9,809
10,459
Other liabilities (including other
liabilities of consolidated VIEs of $16.0 million and $14.3
million, respectively)
61,260
61,321
Liabilities from discontinued
operations
25,293
228,120
Total liabilities
1,160,780
1,347,751
Commitments and contingencies (Note
11)
Stockholders’ equity:
Common stock, $0.001 par value;
500,000,000 shares authorized as of March 31, 2024 and December 31,
2023; 1,795,626 and 1,791,286 shares issued and outstanding as of
March 31, 2024 and December 31, 2023, respectively
2
2
Additional paid-in-capital
2,089,814
2,088,381
Accumulated deficit
(2,028,329
)
(1,960,712
)
Total stockholders’ equity
61,487
127,671
Total liabilities and stockholders’
equity
$
1,222,267
$
1,475,422
VROOM, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share
and per share amounts)
(unaudited)
Three Months Ended March
31,
2024
2023
Interest income
$
51,077
$
34,368
Interest expense:
Warehouse credit facility
9,471
3,099
Securitization debt
4,869
4,345
Total interest expense
14,340
7,444
Net interest income
36,737
26,924
Realized and unrealized losses, net of
recoveries
30,819
15,728
Net interest income after losses and
recoveries
5,918
11,196
Noninterest (loss) income:
Servicing income
2,019
2,854
Warranties and GAP income, net
(9,642
)
2,835
CarStory revenue
2,979
3,170
Gain on debt extinguishment
—
8,709
Other income
2,784
3,032
Total noninterest (loss) income
(1,860
)
20,600
Expenses:
Compensation and benefits
24,110
23,221
Professional fees
3,343
4,973
Software and IT costs
4,622
5,246
Depreciation and amortization
7,626
7,232
Interest expense on corporate debt
1,391
1,340
Impairment charges
2,752
—
Other expenses
4,454
5,199
Total expenses
48,298
47,211
Loss from continuing operations before
provision for income taxes
(44,240
)
(15,415
)
Provision for income taxes from continuing
operations
436
54
Net loss from continuing operations
$
(44,676
)
$
(15,469
)
Net loss from discontinued operations
$
(22,941
)
$
(59,272
)
Net loss
$
(67,617
)
$
(74,741
)
Net loss per share attributable to common
stockholders, continuing operations
$
(24.90
)
$
(8.93
)
Net loss per share attributable to common
stockholders, discontinued operations
$
(12.79
)
$
(34.23
)
Total net loss per share attributable to
common stockholders, basic and diluted
$
(37.68
)
$
(43.16
)
Weighted-average number of shares
outstanding used to compute net loss per share attributable to
common stockholders, basic and diluted
1,794,303
1,731,636
VROOM, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended March
31,
2024
2023
Operating activities
Net loss from continuing operations
$
(44,676
)
$
(15,469
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Impairment charges
2,752
—
Profit share receivable
9,642
—
Gain on debt extinguishment
—
(8,709
)
Depreciation and amortization
7,626
7,224
Amortization of debt issuance costs
843
802
Losses on finance receivables and
securitization debt, net
40,163
16,603
Stock-based compensation expense
1,324
1,679
Provision to record finance receivables
held for sale at lower of cost or fair value
306
(1,251
)
Amortization of unearned discounts on
finance receivables at fair value
(4,792
)
(5,320
)
Other, net
(1,921
)
(3,256
)
Changes in operating assets and
liabilities:
Finance receivables, held for sale
Originations of finance receivables held
for sale
(130,404
)
(143,174
)
Principal payments received on finance
receivables held for sale
40,387
20,731
Other
404
1,850
Interest receivable
342
(3,737
)
Other assets
3,022
7,069
Other liabilities
(61
)
(6,740
)
Net cash used in operating activities from
continuing operations
(75,043
)
(131,698
)
Net cash provided by operating activities
from discontinued operations
98,167
46,677
Net cash provided by (used in) operating
activities
23,124
(85,021
)
Investing activities
Finance receivables at fair value
Originations of finance receivables at
fair value
—
(3,392
)
Principal payments received on finance
receivables at fair value
35,195
41,850
Consolidation of VIEs
—
11,409
Principal payments received on beneficial
interests
773
2,144
Purchase of property and equipment
(644
)
(814
)
Net cash provided by investing activities
from continuing operations
35,324
51,197
Net cash provided by (used in) investing
activities from discontinued operations
5,747
(4,379
)
Net cash provided by investing
activities
41,071
46,818
Financing activities
Proceeds from borrowings under secured
financing agreements
—
238,735
Principal repayment under secured
financing agreements
(73,647
)
(42,784
)
Principal repayments of financing of
beneficial interests in securitizations
(2,651
)
—
Proceeds from warehouse credit
facilities
125,100
135,900
Repayments of warehouse credit
facilities
(30,092
)
(241,351
)
Repurchases of convertible senior
notes
—
(5,883
)
Other financing activities
(40
)
(156
)
Net cash provided by financing activities
from continuing operations
18,670
84,461
Net cash used in financing activities from
discontinued operations
(151,178
)
(129,560
)
Net cash used in financing activities
(132,508
)
(45,099
)
Net decrease in cash, cash equivalents
and restricted cash
(68,313
)
(83,302
)
Cash, cash equivalents and restricted cash
at the beginning of period
208,819
472,010
Cash, cash equivalents and restricted
cash at the end of period
$
140,506
$
388,708
VROOM, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS (continued)
(in thousands)
(unaudited)
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
13,497
$
6,347
Supplemental disclosure of non-cash
investing and financing activities:
Finance receivables from consolidation of
2022-2 securitization transaction
$
—
$
180,706
Elimination of beneficial interest from
the consolidation of 2022-2 securitization transaction
$
—
$
9,811
Securitization debt from consolidation of
2022-2 securitization transaction
$
—
$
186,386
Reclassification of finance receivables
held for sale to finance receivables at fair value, net
$
—
$
248,081
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240510890980/en/
Investor Relations: Vroom Jon Sandison
investors@vroom.com
Vroom (NASDAQ:VRM)
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