Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Vroom Announces Fourth Quarter and Full Year 2023 Results By: Vroom, Inc. via Business Wire March 13, 2024 at 16:05 PM EDT Substantial Progress on Value Maximization Plan Vroom, Inc. (Nasdaq:VRM) today announced financial results for the fourth quarter and fiscal year ended December 31, 2023. HIGHLIGHTS OF FOURTH QUARTER AND FULL YEAR 2023 $135.6 million cash and cash equivalents as of December 31, 2023 4,780 and 17,401 Ecommerce units sold for the fourth quarter and full year, respectively, representing third consecutive quarter of Ecommerce unit growth $4,742 and $3,403 Ecommerce gross profit per unit (GPPU) for the fourth quarter and full year, respectively $(141.3) million and $(365.5) million net loss for the fourth quarter and full year, respectively $(91.6) million and $(277.2) million Adjusted EBITDA for the fourth quarter and full year, respectively, including ~$27 million impact of aged inventory liquidations and inventory write-downs due to the discontinuance of ecommerce operations(1) $41.4 million and $74.2 million convertible note repurchases during the fourth quarter and full year, respectively, for $23.3 million and $36.5 million, respectively CURRENT PROGRESS ON VALUE MAXIMIZATION PLAN Expected to be substantially complete with the ecommerce wind down by the end of the first quarter 2024 ~$94.0 million cash and cash equivalents as of February 29, 2024 Sold substantially all of our used vehicle inventory Repaid outstanding balance on Ally Floorplan Facility Reducing our outstanding commitments and executing a reduction-in-force commensurate with our reduced operations Tom Shortt, the Company’s Chief Executive Officer, said “As we previously announced, in January 2024 Vroom’s Board of Directors approved a Value Maximization Plan pursuant to which the Company has discontinued its ecommerce operations and is winding down its used vehicle dealership business. I am incredibly proud of the commitment and professionalism demonstrated by our team as they execute an orderly wind down of our ecommerce operations with a focus on timeliness and cost effectiveness. We anticipate that the wind-down will be substantially complete by the end of the month and look forward to working to maximize stakeholder value through our remaining businesses, United Auto Credit and CarStory.” (1) While the Value Maximization Plan was approved in January 2024, we determined a triggering event existed as of December 31, 2023 related to our long lived assets, which led to additional write-downs of inventory in the fourth quarter of 2023. FOURTH QUARTER 2023 FINANCIAL DISCUSSION All financial comparisons are on a year-over-year basis unless otherwise noted. Ecommerce Results Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands, except unit data and average days to sale) (in thousands, except unit data and average days to sale) Ecommerce units sold 4,780 4,144 636 15.3 % 17,401 39,278 (21,877 ) (55.7 )% Ecommerce revenue: Vehicle revenue $ 136,360 $ 131,069 $ 5,291 4.0 % $ 523,945 $ 1,304,797 $ (780,852 ) (59.8 )% Product revenue 16,101 10,689 5,412 50.6 % 52,225 59,398 (7,173 ) (12.1 )% Total ecommerce revenue $ 152,461 $ 141,758 $ 10,703 7.6 % $ 576,170 $ 1,364,195 $ (788,025 ) (57.8 )% Ecommerce gross profit: Vehicle gross profit $ 7,387 $ (5,579 ) $ 12,966 232.4 % $ 10,343 $ 40,575 $ (30,232 ) (74.5 )% Product gross profit 15,281 10,689 4,592 43.0 % 48,888 59,398 (10,510 ) (17.7 )% Total ecommerce gross profit $ 22,668 $ 5,110 $ 17,558 343.6 % $ 59,231 $ 99,973 $ (40,742 ) (40.8 )% Average vehicle selling price per ecommerce unit $ 28,527 $ 31,629 $ (3,102 ) (9.8 )% $ 30,110 $ 33,220 $ (3,110 ) (9.4 )% Product revenue per ecommerce unit 3,368 2,579 789 30.6 % 3,001 1,512 1,489 98.5 % Gross profit per ecommerce unit: Vehicle gross profit per ecommerce unit $ 1,545 $ (1,346 ) $ 2,891 214.8 % $ 594 $ 1,033 $ (439 ) (42.5 )% Product gross profit per ecommerce unit 3,197 2,579 618 24.0 % 2,809 1,512 1,297 85.8 % Total gross profit per ecommerce unit $ 4,742 $ 1,233 $ 3,509 284.6 % $ 3,403 $ 2,545 $ 858 33.7 % Ecommerce average days to sale 135 244 (109 ) (44.7 )% 217 131 86 65.6 % Results by Segment Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands, except unit data) (in thousands, except unit data) Units: Ecommerce 4,780 4,144 636 15.3 % 17,401 39,278 (21,877 ) (55.7 )% Wholesale 1,821 1,768 53 3.0 % 7,094 20,876 (13,782 ) (66.0 )% All Other (1) 337 350 (13 ) (3.7 )% 1,359 3,758 (2,399 ) (63.8 )% Total units 6,938 6,262 676 10.8 % 25,854 63,912 (38,058 ) (59.5 )% Revenue: Ecommerce $ 152,461 $ 141,758 $ 10,703 7.6 % $ 576,170 $ 1,364,195 $ (788,025 ) (57.8 )% Wholesale 28,526 23,039 5,487 23.8 % 104,119 293,528 (189,409 ) (64.5 )% Retail Financing (2) 41,999 32,537 9,462 29.1 % 156,938 152,542 4,396 2.9 % All Other (3) 12,938 12,015 923 7.7 % 55,976 138,636 (82,660 ) (59.6 )% Total revenue $ 235,924 $ 209,349 $ 26,575 12.7 % $ 893,203 $ 1,948,901 $ (1,055,698 ) (54.2 )% Gross profit (loss): Ecommerce $ 22,668 $ 5,110 $ 17,558 343.6 % $ 59,231 $ 99,973 $ (40,742 ) (40.8 )% Wholesale (28,927 ) (4,359 ) (24,568 ) 563.6 % (34,353 ) (10,620 ) (23,733 ) 223.5 % Retail Financing (2) 33,427 28,744 4,683 16.3 % 125,610 138,381 (12,771 ) (9.2 )% All Other (3) 1,879 (36 ) 1,915 5,319.4 % 11,459 17,053 (5,594 ) (32.8 )% Total gross profit $ 29,047 $ 29,459 $ (412 ) (1.4 )% $ 161,947 $ 244,787 $ (82,840 ) (33.8 )% Gross profit (loss) per unit (4): Ecommerce $ 4,742 $ 1,233 $ 3,509 284.6 % $ 3,403 $ 2,545 $ 858 33.7 % Wholesale $ (15,885 ) $ (2,465 ) $ (13,420 ) 544.4 % $ (4,843 ) $ (509 ) $ (4,334 ) 851.5 % (1) All Other units consist of retail sales of used vehicles from TDA. (2) The Retail Financing segment represents UACC’s operations with its network of third-party dealership customers as of the closing of the UACC acquisition in February 2022. (3) All Other revenues and gross profit consist of retail sales of used vehicles from TDA and fees earned on sales of value-added products associated with those vehicles sales and the CarStory business. (4) Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit. SG&A Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands) (in thousands) Compensation & benefits $ 35,738 $ 52,043 $ (16,305 ) (31.3 )% $ 166,056 $ 251,153 $ (85,097 ) (33.9 )% Marketing expense 8,570 9,852 (1,282 ) (13.0 )% 48,440 79,670 (31,230 ) (39.2 )% Outbound logistics 2,215 (902 ) 3,117 345.6 % 8,466 39,023 (30,557 ) (78.3 )% Occupancy and related costs 4,410 5,955 (1,545 ) (25.9 )% 18,010 23,363 (5,353 ) (22.9 )% Professional fees 4,625 6,870 (2,245 ) (32.7 )% 20,129 33,455 (13,326 ) (39.8 )% Software and IT costs 8,912 11,164 (2,252 ) (20.2 )% 36,466 44,570 (8,104 ) (18.2 )% Other 13,109 5,778 7,331 126.9 % 43,090 95,153 (52,063 ) (54.7 )% Total selling, general & administrative expenses $ 77,579 $ 90,760 $ (13,181 ) (14.5 )% $ 340,657 $ 566,387 $ (225,730 ) (39.9 )% 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; Adjusted EBITDA; Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues; Adjusted EBITDA excluding securitization gain; and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues. 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, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because each of these non-GAAP financial measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. EBITDA We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense. Adjusted EBITDA We calculate Adjusted EBITDA as EBITDA adjusted to exclude severance costs, gain on debt extinguishment, severe weather-related costs, long-lived asset impairment charges, goodwill impairment charge, realignment costs, acquisition related costs, and the acceleration of non-cash stock-based compensation. Changes in fair value of financial instruments can fluctuate significantly from period to period and previously related primarily to historical finance receivables and debt which have been securitized, and acquired on February 1, 2022 from UACC. As a result of current market conditions, the financial instruments related to the 2022-2 and 2023-1 securitization transactions are recognized on balance-sheet and accounted for under the fair value option. See Note 17 — Financial Instruments and Fair Value Measurements to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. As a result, the majority of our finance receivables are now carried at fair value and a significant portion of the risk of loss associated with these finance receivables have been retained by UACC. We therefore have determined we will no longer make any adjustments for such fluctuations in fair value to our Adjusted EBITDA results. We have recast the prior period presented to conform to current period presentation. We may account for future securitizations as on balance sheet transactions depending on the market conditions. Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues We calculate Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the non-recurring costs incurred to address operational and customer experience issues, including rental cars for our customers and legal settlements with customers and state DMVs. Adjusted EBITDA excluding securitization gain We calculate Adjusted EBITDA excluding securitization gain as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC's finance receivables, and believe that it provides a useful perspective on the underlying operating results and trends and a means to compare our period-over-period results. Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues We calculate Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables and the non-recurring costs incurred to address operational and customer experience issues. The following table presents a reconciliation of the foregoing non-GAAP financial measures to net loss, which is the most directly comparable U.S. GAAP measure: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 (in thousands) (in thousands) Net loss $ (141,321 ) $ 24,765 $ (365,540 ) $ (451,910 ) Adjusted to exclude the following: Interest expense 14,530 12,076 45,445 40,693 Interest income (4,789 ) (6,372 ) (21,158 ) (19,363 ) Provision (benefit) for income taxes (303 ) 2,405 615 (19,680 ) Depreciation and amortization 11,055 10,702 43,476 38,707 EBITDA $ (120,828 ) $ 43,576 $ (297,162 ) $ (411,553 ) Severance costs $ 48 $ — $ 6,703 $ — Gain on debt extinguishment (18,238 ) (126,767 ) (37,878 ) (164,684 ) Hail storm costs — — 2,353 — Long-lived asset impairment charges 47,396 3,679 48,748 5,806 Goodwill impairment charge — — — 201,703 Realignment costs — 2,253 — 15,025 Acquisition related costs — — — 5,653 Acceleration of non-cash stock-based compensation — 2,439 — 2,439 Adjusted EBITDA $ (91,622 ) $ (74,820 ) $ (277,236 ) $ (345,611 ) Non-recurring costs to address operational and customer experience issues 3,247 374 4,065 25,433 Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (74,446 ) $ (273,171 ) $ (320,178 ) Securitization gain — — — (45,589 ) Adjusted EBITDA excluding securitization gain $ (91,622 ) $ (74,820 ) $ (277,236 ) $ (391,200 ) Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (74,446 ) $ (273,171 ) $ (365,767 ) FOURTH QUARTER 2023 AS COMPARED TO THIRD QUARTER 2023 Three Months Ended December 31, Three Months Ended September 30, 2023 2023 Change % Change (in thousands, except unit data) Total revenues $ 235,924 $ 235,634 $ 290 0.1 % Total gross profit $ 29,047 $ 48,094 $ (19,047 ) (39.6 )% Ecommerce units sold 4,780 4,561 219 4.8 % Ecommerce revenue $ 152,461 $ 149,851 $ 2,610 1.7 % Ecommerce gross profit $ 22,668 $ 14,339 $ 8,329 58.1 % Vehicle gross profit (loss) per ecommerce unit $ 1,545 $ 516 $ 1,029 199.4 % Product gross profit per ecommerce unit 3,197 2,628 569 21.7 % Total gross profit per ecommerce unit $ 4,742 $ 3,144 $ 1,598 50.8 % Wholesale units sold 1,821 2,270 (449 ) (19.8 )% Wholesale revenue $ 28,526 $ 30,898 $ (2,372 ) (7.7 )% Wholesale gross (loss) profit $ (28,927 ) $ (1,495 ) $ (27,432 ) 1,834.9 % Wholesale gross (loss) profit per unit $ (15,885 ) $ (659 ) $ (15,226 ) 2,310.5 % Retail Financing revenue $ 41,999 $ 40,823 $ 1,176 2.9 % Retail Financing gross profit $ 33,427 $ 32,341 $ 1,086 3.4 % Total selling, general, and administrative expenses $ 77,579 $ 79,586 $ (2,007 ) (2.5 )% Three Months Ended December 31, Three Months Ended September 30, 2023 2023 Change % Change (in thousands) Net loss $ (141,321 ) $ (82,857 ) $ (58,464 ) 70.6 % Adjusted to exclude the following: Interest expense 14,530 12,058 2,472 20.5 % Interest income (4,789 ) (5,506 ) 717 13.0 % Provision for income taxes (303 ) 260 (563 ) (216.5 )% Depreciation and amortization 11,055 11,248 (193 ) (1.7 )% EBITDA $ (120,828 ) $ (64,797 ) $ (56,031 ) 86.5 % Severance costs $ 48 $ 274 $ (226 ) (82.4 )% Gain on debt extinguishment (18,238 ) — (18,238 ) (100.0 )% Long-lived asset impairment charges 47,396 — 47,396 100.0 % Adjusted EBITDA $ (91,622 ) $ (64,523 ) $ (27,099 ) 42.0 % Non-recurring costs to address operational and customer experience issues 3,247 32 3,215 10,047.2 % Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (64,491 ) $ (23,884 ) (37.0 )% Securitization gain — — — 0.0 % Adjusted EBITDA excluding securitization gain $ (91,622 ) $ (64,523 ) $ (27,099 ) 42.0 % Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (64,491 ) $ (23,884 ) 37.0 % Liquidity Outlook We expect year-end 2024 cash and cash equivalents in the range of $35.0 to $65.0 million. The foregoing estimate is a forward-looking statement that reflects the Company’s expectation as of March 13, 2024 and is subject to substantial uncertainty. See “Forward-Looking Statements” below. 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 is winding down its 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, any anticipated costs and charges related to the Value Maximization Plan and the anticipated timeline of such costs, charges, implementation or completion of the Value Maximization Plan, our expectations regarding United Auto Credit Corporation and CarStory; our ability to successfully wind down and halt our ecommerce operations, 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, 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 December 31, 2023 2022 ASSETS Current Assets: Cash and cash equivalents $ 135,585 $ 398,915 Restricted cash (including restricted cash of consolidated VIEs of $49.1 million and $24.7 million, respectively) 73,234 73,095 Accounts receivable, net of allowance of $11.2 million and $21.5 million, respectively 9,139 13,967 Finance receivables at fair value (including finance receivables of consolidated VIEs of $11.8 million and $11.5 million, respectively) 12,501 12,939 Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $457.2 million and $305.9 million, respectively) 503,546 321,626 Inventory 163,250 320,648 Beneficial interests in securitizations 4,485 20,592 Prepaid expenses and other current assets (including other current assets of consolidated VIEs of $25.2 million and $11.7 million, respectively) 50,899 58,327 Total current assets 952,639 1,220,109 Finance receivables at fair value (including finance receivables of consolidated VIEs of $329.6 million and $119.6 million, respectively) 336,169 140,235 Property and equipment, net 24,132 50,201 Intangible assets, net 131,892 158,910 Operating lease right-of-use assets 7,063 23,568 Other assets (including other assets of consolidated VIEs of $1.8 million and $0 million, respectively) 23,527 26,004 Total assets $ 1,475,422 $ 1,619,027 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 26,762 $ 34,702 Accrued expenses (including accrued expenses of consolidated VIEs of $4.0 million and $1.5 million, respectively) 52,452 76,795 Vehicle floorplan 151,178 276,988 Warehouse credit facilities of consolidated VIEs 421,268 229,518 Current portion of long-term debt (including current portion of securitization debt of consolidated VIEs at fair value of $163.5 million and $47.2 million, respectively) 172,410 47,239 Deferred revenue 14,025 10,655 Operating lease liabilities, current 8,737 9,730 Other current liabilities 9,974 17,693 Total current liabilities 856,806 703,320 Long-term debt, net of current portion (including securitization debt of consolidated VIEs of $150.6 million and $32.6 million at fair value, respectively) 454,173 402,154 Operating lease liabilities, excluding current portion 25,183 20,129 Other long-term liabilities (including other long-term liabilities of consolidated VIEs of $10.4 million and $7.4 million, respectively) 17,109 18,183 Total liabilities 1,353,271 1,143,786 Commitments and contingencies (Note 14) Stockholders’ equity: Common stock, $0.001 par value; 500,000,000 shares authorized as of December 31, 2023 and 2022; 1,791,286 and 1,727,525 shares issued and outstanding as of December 31, 2023 and 2022, respectively 2 2 Additional paid-in-capital 2,088,381 2,075,931 Accumulated deficit (1,966,232 ) (1,600,692 ) Total stockholders’ equity 122,151 475,241 Total liabilities and stockholders’ equity $ 1,475,422 $ 1,619,027 VROOM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Revenue: Retail vehicle, net $ 146,424 $ 142,579 $ 565,972 $ 1,425,842 Wholesale vehicle 28,526 23,039 104,119 293,528 Product, net 15,754 10,793 52,253 62,747 Finance 41,999 32,537 156,938 152,542 Other 3,221 401 13,921 14,242 Total revenue 235,924 209,349 893,203 1,948,901 Cost of sales: Retail vehicle 138,648 147,867 553,565 1,382,005 Wholesale vehicle 57,453 27,399 138,472 304,148 Product 819 — 3,337 — Finance 8,573 3,793 31,328 14,161 Other 1,384 831 4,554 3,800 Total cost of sales 206,877 179,890 731,256 1,704,114 Total gross profit 29,047 29,459 161,947 244,787 Selling, general and administrative expenses 77,579 90,760 340,657 566,387 Depreciation and amortization 10,924 10,562 42,769 38,290 Impairment charges 47,395 5,746 48,748 211,873 Loss from operations (106,851 ) (77,609 ) (270,227 ) (571,763 ) Gain on debt extinguishment (18,238 ) (126,767 ) (37,878 ) (164,684 ) Interest expense 14,530 12,076 45,445 40,693 Interest income (4,789 ) (6,372 ) (21,158 ) (19,363 ) Other loss, net 43,270 16,284 108,289 43,181 (Loss) income before provision for income taxes (141,624 ) 27,170 (364,925 ) (471,590 ) (Benefit) provision for income taxes (303 ) 2,405 615 (19,680 ) Net (loss) income $ (141,321 ) $ 24,765 $ (365,540 ) $ (451,910 ) Net (loss) income per share attributable to common stockholders, basic $ (80.51 ) $ 14.34 $ (209.70 ) $ (262.15 ) Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders, basic 1,755,387 1,727,203 1,743,128 1,723,843 Net (loss) income per share attributable to common stockholders, diluted $ (80.51 ) $ 13.52 $ (209.70 ) $ (262.15 ) Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders, diluted 1,755,387 1,832,223 1,743,128 1,723,843 VROOM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Year Ended December 31, 2023 2022 Operating activities Net loss $ (365,540 ) $ (451,910 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment charges 48,748 211,873 Gain on debt extinguishment (37,878 ) (164,684 ) Depreciation and amortization 43,476 38,707 Amortization of debt issuance costs 4,598 4,809 Realized gains on securitization transactions — (45,589 ) Deferred taxes — (23,855 ) Losses on finance receivables and securitization debt, net 114,702 66,839 Stock-based compensation expense 10,051 11,957 Provision to record inventory at lower of cost or net realizable value (2,360 ) 1,812 Provision for bad debt 4,074 13,406 Provision to record finance receivables held for sale at lower of cost or fair value 20,566 6,541 Amortization of unearned discounts on finance receivables at fair value (25,954 ) (14,593 ) Other, net (17,393 ) (7,512 ) Changes in operating assets and liabilities: Finance receivables, held for sale Originations of finance receivables held for sale (582,170 ) (625,575 ) Principal payments received on finance receivables held for sale 105,858 64,521 Proceeds from sale of finance receivables held for sale, net — 509,612 Other (1,606 ) (7,701 ) Accounts receivable 754 78,060 Inventory 159,758 403,924 Prepaid expenses and other current assets 22,711 4,146 Other assets 3,266 (2,546 ) Accounts payable (7,940 ) (24,281 ) Accrued expenses (24,766 ) (53,553 ) Deferred revenue 3,370 (65,148 ) Other liabilities (10,009 ) (38,325 ) Net cash used in operating activities (533,684 ) (109,065 ) Investing activities Finance receivables at fair value Purchases of finance receivables at fair value (3,392 ) (56,484 ) Principal payments received on finance receivables at fair value 174,748 132,391 Proceeds from sale of finance receivables at fair value, net — 43,262 Consolidation of VIEs 11,409 — Principal payments received on beneficial interests 5,193 8,341 Purchase of property and equipment (14,805 ) (24,234 ) Acquisition of business, net of cash acquired of $47.9 million — (267,488 ) Net cash provided by (used in) investing activities 173,153 (164,212 ) Financing activities Proceeds from the issuance of common stock in at-the-market offering, net of offering costs 2,399 — Proceeds from borrowings under secured financing agreements 261,991 — Principal repayment under secured financing agreements (208,476 ) (192,839 ) Proceeds from financing of beneficial interests in securitizations 24,506 — Principal repayments of financing of beneficial interests in securitizations (8,698 ) — Proceeds from vehicle floorplan 559,331 1,403,042 Repayments of vehicle floorplan (685,141 ) (1,638,855 ) Proceeds from warehouse credit facilities 480,100 520,800 Repayments of warehouse credit facilities (290,483 ) (467,216 ) Repurchases of convertible senior notes (36,536 ) (90,208 ) Other financing activities (1,653 ) (4,212 ) Net cash provided by (used in) financing activities 97,340 (469,488 ) Net (decrease) increase in cash, cash equivalents and restricted cash (263,191 ) (742,765 ) Cash, cash equivalents and restricted cash at the beginning of period 472,010 1,214,775 Cash, cash equivalents and restricted cash at the end of period $ 208,819 $ 472,010 VROOM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) (unaudited) Supplemental disclosure of cash flow information: Cash paid for interest $ 59,351 $ 34,907 Cash paid for income taxes $ 5,363 $ 2,409 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 $ — Fair value of beneficial interests received in securitization transactions $ — $ 30,082 View source version on businesswire.com: https://www.businesswire.com/news/home/20240313922393/en/Contacts Investor Relations: Vroom Jon Sandison investors@vroom.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Vroom Announces Fourth Quarter and Full Year 2023 Results By: Vroom, Inc. via Business Wire March 13, 2024 at 16:05 PM EDT Substantial Progress on Value Maximization Plan Vroom, Inc. (Nasdaq:VRM) today announced financial results for the fourth quarter and fiscal year ended December 31, 2023. HIGHLIGHTS OF FOURTH QUARTER AND FULL YEAR 2023 $135.6 million cash and cash equivalents as of December 31, 2023 4,780 and 17,401 Ecommerce units sold for the fourth quarter and full year, respectively, representing third consecutive quarter of Ecommerce unit growth $4,742 and $3,403 Ecommerce gross profit per unit (GPPU) for the fourth quarter and full year, respectively $(141.3) million and $(365.5) million net loss for the fourth quarter and full year, respectively $(91.6) million and $(277.2) million Adjusted EBITDA for the fourth quarter and full year, respectively, including ~$27 million impact of aged inventory liquidations and inventory write-downs due to the discontinuance of ecommerce operations(1) $41.4 million and $74.2 million convertible note repurchases during the fourth quarter and full year, respectively, for $23.3 million and $36.5 million, respectively CURRENT PROGRESS ON VALUE MAXIMIZATION PLAN Expected to be substantially complete with the ecommerce wind down by the end of the first quarter 2024 ~$94.0 million cash and cash equivalents as of February 29, 2024 Sold substantially all of our used vehicle inventory Repaid outstanding balance on Ally Floorplan Facility Reducing our outstanding commitments and executing a reduction-in-force commensurate with our reduced operations Tom Shortt, the Company’s Chief Executive Officer, said “As we previously announced, in January 2024 Vroom’s Board of Directors approved a Value Maximization Plan pursuant to which the Company has discontinued its ecommerce operations and is winding down its used vehicle dealership business. I am incredibly proud of the commitment and professionalism demonstrated by our team as they execute an orderly wind down of our ecommerce operations with a focus on timeliness and cost effectiveness. We anticipate that the wind-down will be substantially complete by the end of the month and look forward to working to maximize stakeholder value through our remaining businesses, United Auto Credit and CarStory.” (1) While the Value Maximization Plan was approved in January 2024, we determined a triggering event existed as of December 31, 2023 related to our long lived assets, which led to additional write-downs of inventory in the fourth quarter of 2023. FOURTH QUARTER 2023 FINANCIAL DISCUSSION All financial comparisons are on a year-over-year basis unless otherwise noted. Ecommerce Results Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands, except unit data and average days to sale) (in thousands, except unit data and average days to sale) Ecommerce units sold 4,780 4,144 636 15.3 % 17,401 39,278 (21,877 ) (55.7 )% Ecommerce revenue: Vehicle revenue $ 136,360 $ 131,069 $ 5,291 4.0 % $ 523,945 $ 1,304,797 $ (780,852 ) (59.8 )% Product revenue 16,101 10,689 5,412 50.6 % 52,225 59,398 (7,173 ) (12.1 )% Total ecommerce revenue $ 152,461 $ 141,758 $ 10,703 7.6 % $ 576,170 $ 1,364,195 $ (788,025 ) (57.8 )% Ecommerce gross profit: Vehicle gross profit $ 7,387 $ (5,579 ) $ 12,966 232.4 % $ 10,343 $ 40,575 $ (30,232 ) (74.5 )% Product gross profit 15,281 10,689 4,592 43.0 % 48,888 59,398 (10,510 ) (17.7 )% Total ecommerce gross profit $ 22,668 $ 5,110 $ 17,558 343.6 % $ 59,231 $ 99,973 $ (40,742 ) (40.8 )% Average vehicle selling price per ecommerce unit $ 28,527 $ 31,629 $ (3,102 ) (9.8 )% $ 30,110 $ 33,220 $ (3,110 ) (9.4 )% Product revenue per ecommerce unit 3,368 2,579 789 30.6 % 3,001 1,512 1,489 98.5 % Gross profit per ecommerce unit: Vehicle gross profit per ecommerce unit $ 1,545 $ (1,346 ) $ 2,891 214.8 % $ 594 $ 1,033 $ (439 ) (42.5 )% Product gross profit per ecommerce unit 3,197 2,579 618 24.0 % 2,809 1,512 1,297 85.8 % Total gross profit per ecommerce unit $ 4,742 $ 1,233 $ 3,509 284.6 % $ 3,403 $ 2,545 $ 858 33.7 % Ecommerce average days to sale 135 244 (109 ) (44.7 )% 217 131 86 65.6 % Results by Segment Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands, except unit data) (in thousands, except unit data) Units: Ecommerce 4,780 4,144 636 15.3 % 17,401 39,278 (21,877 ) (55.7 )% Wholesale 1,821 1,768 53 3.0 % 7,094 20,876 (13,782 ) (66.0 )% All Other (1) 337 350 (13 ) (3.7 )% 1,359 3,758 (2,399 ) (63.8 )% Total units 6,938 6,262 676 10.8 % 25,854 63,912 (38,058 ) (59.5 )% Revenue: Ecommerce $ 152,461 $ 141,758 $ 10,703 7.6 % $ 576,170 $ 1,364,195 $ (788,025 ) (57.8 )% Wholesale 28,526 23,039 5,487 23.8 % 104,119 293,528 (189,409 ) (64.5 )% Retail Financing (2) 41,999 32,537 9,462 29.1 % 156,938 152,542 4,396 2.9 % All Other (3) 12,938 12,015 923 7.7 % 55,976 138,636 (82,660 ) (59.6 )% Total revenue $ 235,924 $ 209,349 $ 26,575 12.7 % $ 893,203 $ 1,948,901 $ (1,055,698 ) (54.2 )% Gross profit (loss): Ecommerce $ 22,668 $ 5,110 $ 17,558 343.6 % $ 59,231 $ 99,973 $ (40,742 ) (40.8 )% Wholesale (28,927 ) (4,359 ) (24,568 ) 563.6 % (34,353 ) (10,620 ) (23,733 ) 223.5 % Retail Financing (2) 33,427 28,744 4,683 16.3 % 125,610 138,381 (12,771 ) (9.2 )% All Other (3) 1,879 (36 ) 1,915 5,319.4 % 11,459 17,053 (5,594 ) (32.8 )% Total gross profit $ 29,047 $ 29,459 $ (412 ) (1.4 )% $ 161,947 $ 244,787 $ (82,840 ) (33.8 )% Gross profit (loss) per unit (4): Ecommerce $ 4,742 $ 1,233 $ 3,509 284.6 % $ 3,403 $ 2,545 $ 858 33.7 % Wholesale $ (15,885 ) $ (2,465 ) $ (13,420 ) 544.4 % $ (4,843 ) $ (509 ) $ (4,334 ) 851.5 % (1) All Other units consist of retail sales of used vehicles from TDA. (2) The Retail Financing segment represents UACC’s operations with its network of third-party dealership customers as of the closing of the UACC acquisition in February 2022. (3) All Other revenues and gross profit consist of retail sales of used vehicles from TDA and fees earned on sales of value-added products associated with those vehicles sales and the CarStory business. (4) Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit. SG&A Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands) (in thousands) Compensation & benefits $ 35,738 $ 52,043 $ (16,305 ) (31.3 )% $ 166,056 $ 251,153 $ (85,097 ) (33.9 )% Marketing expense 8,570 9,852 (1,282 ) (13.0 )% 48,440 79,670 (31,230 ) (39.2 )% Outbound logistics 2,215 (902 ) 3,117 345.6 % 8,466 39,023 (30,557 ) (78.3 )% Occupancy and related costs 4,410 5,955 (1,545 ) (25.9 )% 18,010 23,363 (5,353 ) (22.9 )% Professional fees 4,625 6,870 (2,245 ) (32.7 )% 20,129 33,455 (13,326 ) (39.8 )% Software and IT costs 8,912 11,164 (2,252 ) (20.2 )% 36,466 44,570 (8,104 ) (18.2 )% Other 13,109 5,778 7,331 126.9 % 43,090 95,153 (52,063 ) (54.7 )% Total selling, general & administrative expenses $ 77,579 $ 90,760 $ (13,181 ) (14.5 )% $ 340,657 $ 566,387 $ (225,730 ) (39.9 )% 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; Adjusted EBITDA; Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues; Adjusted EBITDA excluding securitization gain; and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues. 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, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because each of these non-GAAP financial measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. EBITDA We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense. Adjusted EBITDA We calculate Adjusted EBITDA as EBITDA adjusted to exclude severance costs, gain on debt extinguishment, severe weather-related costs, long-lived asset impairment charges, goodwill impairment charge, realignment costs, acquisition related costs, and the acceleration of non-cash stock-based compensation. Changes in fair value of financial instruments can fluctuate significantly from period to period and previously related primarily to historical finance receivables and debt which have been securitized, and acquired on February 1, 2022 from UACC. As a result of current market conditions, the financial instruments related to the 2022-2 and 2023-1 securitization transactions are recognized on balance-sheet and accounted for under the fair value option. See Note 17 — Financial Instruments and Fair Value Measurements to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. As a result, the majority of our finance receivables are now carried at fair value and a significant portion of the risk of loss associated with these finance receivables have been retained by UACC. We therefore have determined we will no longer make any adjustments for such fluctuations in fair value to our Adjusted EBITDA results. We have recast the prior period presented to conform to current period presentation. We may account for future securitizations as on balance sheet transactions depending on the market conditions. Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues We calculate Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the non-recurring costs incurred to address operational and customer experience issues, including rental cars for our customers and legal settlements with customers and state DMVs. Adjusted EBITDA excluding securitization gain We calculate Adjusted EBITDA excluding securitization gain as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC's finance receivables, and believe that it provides a useful perspective on the underlying operating results and trends and a means to compare our period-over-period results. Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues We calculate Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables and the non-recurring costs incurred to address operational and customer experience issues. The following table presents a reconciliation of the foregoing non-GAAP financial measures to net loss, which is the most directly comparable U.S. GAAP measure: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 (in thousands) (in thousands) Net loss $ (141,321 ) $ 24,765 $ (365,540 ) $ (451,910 ) Adjusted to exclude the following: Interest expense 14,530 12,076 45,445 40,693 Interest income (4,789 ) (6,372 ) (21,158 ) (19,363 ) Provision (benefit) for income taxes (303 ) 2,405 615 (19,680 ) Depreciation and amortization 11,055 10,702 43,476 38,707 EBITDA $ (120,828 ) $ 43,576 $ (297,162 ) $ (411,553 ) Severance costs $ 48 $ — $ 6,703 $ — Gain on debt extinguishment (18,238 ) (126,767 ) (37,878 ) (164,684 ) Hail storm costs — — 2,353 — Long-lived asset impairment charges 47,396 3,679 48,748 5,806 Goodwill impairment charge — — — 201,703 Realignment costs — 2,253 — 15,025 Acquisition related costs — — — 5,653 Acceleration of non-cash stock-based compensation — 2,439 — 2,439 Adjusted EBITDA $ (91,622 ) $ (74,820 ) $ (277,236 ) $ (345,611 ) Non-recurring costs to address operational and customer experience issues 3,247 374 4,065 25,433 Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (74,446 ) $ (273,171 ) $ (320,178 ) Securitization gain — — — (45,589 ) Adjusted EBITDA excluding securitization gain $ (91,622 ) $ (74,820 ) $ (277,236 ) $ (391,200 ) Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (74,446 ) $ (273,171 ) $ (365,767 ) FOURTH QUARTER 2023 AS COMPARED TO THIRD QUARTER 2023 Three Months Ended December 31, Three Months Ended September 30, 2023 2023 Change % Change (in thousands, except unit data) Total revenues $ 235,924 $ 235,634 $ 290 0.1 % Total gross profit $ 29,047 $ 48,094 $ (19,047 ) (39.6 )% Ecommerce units sold 4,780 4,561 219 4.8 % Ecommerce revenue $ 152,461 $ 149,851 $ 2,610 1.7 % Ecommerce gross profit $ 22,668 $ 14,339 $ 8,329 58.1 % Vehicle gross profit (loss) per ecommerce unit $ 1,545 $ 516 $ 1,029 199.4 % Product gross profit per ecommerce unit 3,197 2,628 569 21.7 % Total gross profit per ecommerce unit $ 4,742 $ 3,144 $ 1,598 50.8 % Wholesale units sold 1,821 2,270 (449 ) (19.8 )% Wholesale revenue $ 28,526 $ 30,898 $ (2,372 ) (7.7 )% Wholesale gross (loss) profit $ (28,927 ) $ (1,495 ) $ (27,432 ) 1,834.9 % Wholesale gross (loss) profit per unit $ (15,885 ) $ (659 ) $ (15,226 ) 2,310.5 % Retail Financing revenue $ 41,999 $ 40,823 $ 1,176 2.9 % Retail Financing gross profit $ 33,427 $ 32,341 $ 1,086 3.4 % Total selling, general, and administrative expenses $ 77,579 $ 79,586 $ (2,007 ) (2.5 )% Three Months Ended December 31, Three Months Ended September 30, 2023 2023 Change % Change (in thousands) Net loss $ (141,321 ) $ (82,857 ) $ (58,464 ) 70.6 % Adjusted to exclude the following: Interest expense 14,530 12,058 2,472 20.5 % Interest income (4,789 ) (5,506 ) 717 13.0 % Provision for income taxes (303 ) 260 (563 ) (216.5 )% Depreciation and amortization 11,055 11,248 (193 ) (1.7 )% EBITDA $ (120,828 ) $ (64,797 ) $ (56,031 ) 86.5 % Severance costs $ 48 $ 274 $ (226 ) (82.4 )% Gain on debt extinguishment (18,238 ) — (18,238 ) (100.0 )% Long-lived asset impairment charges 47,396 — 47,396 100.0 % Adjusted EBITDA $ (91,622 ) $ (64,523 ) $ (27,099 ) 42.0 % Non-recurring costs to address operational and customer experience issues 3,247 32 3,215 10,047.2 % Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (64,491 ) $ (23,884 ) (37.0 )% Securitization gain — — — 0.0 % Adjusted EBITDA excluding securitization gain $ (91,622 ) $ (64,523 ) $ (27,099 ) 42.0 % Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (64,491 ) $ (23,884 ) 37.0 % Liquidity Outlook We expect year-end 2024 cash and cash equivalents in the range of $35.0 to $65.0 million. The foregoing estimate is a forward-looking statement that reflects the Company’s expectation as of March 13, 2024 and is subject to substantial uncertainty. See “Forward-Looking Statements” below. 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 is winding down its 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, any anticipated costs and charges related to the Value Maximization Plan and the anticipated timeline of such costs, charges, implementation or completion of the Value Maximization Plan, our expectations regarding United Auto Credit Corporation and CarStory; our ability to successfully wind down and halt our ecommerce operations, 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, 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 December 31, 2023 2022 ASSETS Current Assets: Cash and cash equivalents $ 135,585 $ 398,915 Restricted cash (including restricted cash of consolidated VIEs of $49.1 million and $24.7 million, respectively) 73,234 73,095 Accounts receivable, net of allowance of $11.2 million and $21.5 million, respectively 9,139 13,967 Finance receivables at fair value (including finance receivables of consolidated VIEs of $11.8 million and $11.5 million, respectively) 12,501 12,939 Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $457.2 million and $305.9 million, respectively) 503,546 321,626 Inventory 163,250 320,648 Beneficial interests in securitizations 4,485 20,592 Prepaid expenses and other current assets (including other current assets of consolidated VIEs of $25.2 million and $11.7 million, respectively) 50,899 58,327 Total current assets 952,639 1,220,109 Finance receivables at fair value (including finance receivables of consolidated VIEs of $329.6 million and $119.6 million, respectively) 336,169 140,235 Property and equipment, net 24,132 50,201 Intangible assets, net 131,892 158,910 Operating lease right-of-use assets 7,063 23,568 Other assets (including other assets of consolidated VIEs of $1.8 million and $0 million, respectively) 23,527 26,004 Total assets $ 1,475,422 $ 1,619,027 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 26,762 $ 34,702 Accrued expenses (including accrued expenses of consolidated VIEs of $4.0 million and $1.5 million, respectively) 52,452 76,795 Vehicle floorplan 151,178 276,988 Warehouse credit facilities of consolidated VIEs 421,268 229,518 Current portion of long-term debt (including current portion of securitization debt of consolidated VIEs at fair value of $163.5 million and $47.2 million, respectively) 172,410 47,239 Deferred revenue 14,025 10,655 Operating lease liabilities, current 8,737 9,730 Other current liabilities 9,974 17,693 Total current liabilities 856,806 703,320 Long-term debt, net of current portion (including securitization debt of consolidated VIEs of $150.6 million and $32.6 million at fair value, respectively) 454,173 402,154 Operating lease liabilities, excluding current portion 25,183 20,129 Other long-term liabilities (including other long-term liabilities of consolidated VIEs of $10.4 million and $7.4 million, respectively) 17,109 18,183 Total liabilities 1,353,271 1,143,786 Commitments and contingencies (Note 14) Stockholders’ equity: Common stock, $0.001 par value; 500,000,000 shares authorized as of December 31, 2023 and 2022; 1,791,286 and 1,727,525 shares issued and outstanding as of December 31, 2023 and 2022, respectively 2 2 Additional paid-in-capital 2,088,381 2,075,931 Accumulated deficit (1,966,232 ) (1,600,692 ) Total stockholders’ equity 122,151 475,241 Total liabilities and stockholders’ equity $ 1,475,422 $ 1,619,027 VROOM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Revenue: Retail vehicle, net $ 146,424 $ 142,579 $ 565,972 $ 1,425,842 Wholesale vehicle 28,526 23,039 104,119 293,528 Product, net 15,754 10,793 52,253 62,747 Finance 41,999 32,537 156,938 152,542 Other 3,221 401 13,921 14,242 Total revenue 235,924 209,349 893,203 1,948,901 Cost of sales: Retail vehicle 138,648 147,867 553,565 1,382,005 Wholesale vehicle 57,453 27,399 138,472 304,148 Product 819 — 3,337 — Finance 8,573 3,793 31,328 14,161 Other 1,384 831 4,554 3,800 Total cost of sales 206,877 179,890 731,256 1,704,114 Total gross profit 29,047 29,459 161,947 244,787 Selling, general and administrative expenses 77,579 90,760 340,657 566,387 Depreciation and amortization 10,924 10,562 42,769 38,290 Impairment charges 47,395 5,746 48,748 211,873 Loss from operations (106,851 ) (77,609 ) (270,227 ) (571,763 ) Gain on debt extinguishment (18,238 ) (126,767 ) (37,878 ) (164,684 ) Interest expense 14,530 12,076 45,445 40,693 Interest income (4,789 ) (6,372 ) (21,158 ) (19,363 ) Other loss, net 43,270 16,284 108,289 43,181 (Loss) income before provision for income taxes (141,624 ) 27,170 (364,925 ) (471,590 ) (Benefit) provision for income taxes (303 ) 2,405 615 (19,680 ) Net (loss) income $ (141,321 ) $ 24,765 $ (365,540 ) $ (451,910 ) Net (loss) income per share attributable to common stockholders, basic $ (80.51 ) $ 14.34 $ (209.70 ) $ (262.15 ) Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders, basic 1,755,387 1,727,203 1,743,128 1,723,843 Net (loss) income per share attributable to common stockholders, diluted $ (80.51 ) $ 13.52 $ (209.70 ) $ (262.15 ) Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders, diluted 1,755,387 1,832,223 1,743,128 1,723,843 VROOM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Year Ended December 31, 2023 2022 Operating activities Net loss $ (365,540 ) $ (451,910 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment charges 48,748 211,873 Gain on debt extinguishment (37,878 ) (164,684 ) Depreciation and amortization 43,476 38,707 Amortization of debt issuance costs 4,598 4,809 Realized gains on securitization transactions — (45,589 ) Deferred taxes — (23,855 ) Losses on finance receivables and securitization debt, net 114,702 66,839 Stock-based compensation expense 10,051 11,957 Provision to record inventory at lower of cost or net realizable value (2,360 ) 1,812 Provision for bad debt 4,074 13,406 Provision to record finance receivables held for sale at lower of cost or fair value 20,566 6,541 Amortization of unearned discounts on finance receivables at fair value (25,954 ) (14,593 ) Other, net (17,393 ) (7,512 ) Changes in operating assets and liabilities: Finance receivables, held for sale Originations of finance receivables held for sale (582,170 ) (625,575 ) Principal payments received on finance receivables held for sale 105,858 64,521 Proceeds from sale of finance receivables held for sale, net — 509,612 Other (1,606 ) (7,701 ) Accounts receivable 754 78,060 Inventory 159,758 403,924 Prepaid expenses and other current assets 22,711 4,146 Other assets 3,266 (2,546 ) Accounts payable (7,940 ) (24,281 ) Accrued expenses (24,766 ) (53,553 ) Deferred revenue 3,370 (65,148 ) Other liabilities (10,009 ) (38,325 ) Net cash used in operating activities (533,684 ) (109,065 ) Investing activities Finance receivables at fair value Purchases of finance receivables at fair value (3,392 ) (56,484 ) Principal payments received on finance receivables at fair value 174,748 132,391 Proceeds from sale of finance receivables at fair value, net — 43,262 Consolidation of VIEs 11,409 — Principal payments received on beneficial interests 5,193 8,341 Purchase of property and equipment (14,805 ) (24,234 ) Acquisition of business, net of cash acquired of $47.9 million — (267,488 ) Net cash provided by (used in) investing activities 173,153 (164,212 ) Financing activities Proceeds from the issuance of common stock in at-the-market offering, net of offering costs 2,399 — Proceeds from borrowings under secured financing agreements 261,991 — Principal repayment under secured financing agreements (208,476 ) (192,839 ) Proceeds from financing of beneficial interests in securitizations 24,506 — Principal repayments of financing of beneficial interests in securitizations (8,698 ) — Proceeds from vehicle floorplan 559,331 1,403,042 Repayments of vehicle floorplan (685,141 ) (1,638,855 ) Proceeds from warehouse credit facilities 480,100 520,800 Repayments of warehouse credit facilities (290,483 ) (467,216 ) Repurchases of convertible senior notes (36,536 ) (90,208 ) Other financing activities (1,653 ) (4,212 ) Net cash provided by (used in) financing activities 97,340 (469,488 ) Net (decrease) increase in cash, cash equivalents and restricted cash (263,191 ) (742,765 ) Cash, cash equivalents and restricted cash at the beginning of period 472,010 1,214,775 Cash, cash equivalents and restricted cash at the end of period $ 208,819 $ 472,010 VROOM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) (unaudited) Supplemental disclosure of cash flow information: Cash paid for interest $ 59,351 $ 34,907 Cash paid for income taxes $ 5,363 $ 2,409 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 $ — Fair value of beneficial interests received in securitization transactions $ — $ 30,082 View source version on businesswire.com: https://www.businesswire.com/news/home/20240313922393/en/Contacts Investor Relations: Vroom Jon Sandison investors@vroom.com
Vroom, Inc. (Nasdaq:VRM) today announced financial results for the fourth quarter and fiscal year ended December 31, 2023. HIGHLIGHTS OF FOURTH QUARTER AND FULL YEAR 2023 $135.6 million cash and cash equivalents as of December 31, 2023 4,780 and 17,401 Ecommerce units sold for the fourth quarter and full year, respectively, representing third consecutive quarter of Ecommerce unit growth $4,742 and $3,403 Ecommerce gross profit per unit (GPPU) for the fourth quarter and full year, respectively $(141.3) million and $(365.5) million net loss for the fourth quarter and full year, respectively $(91.6) million and $(277.2) million Adjusted EBITDA for the fourth quarter and full year, respectively, including ~$27 million impact of aged inventory liquidations and inventory write-downs due to the discontinuance of ecommerce operations(1) $41.4 million and $74.2 million convertible note repurchases during the fourth quarter and full year, respectively, for $23.3 million and $36.5 million, respectively CURRENT PROGRESS ON VALUE MAXIMIZATION PLAN Expected to be substantially complete with the ecommerce wind down by the end of the first quarter 2024 ~$94.0 million cash and cash equivalents as of February 29, 2024 Sold substantially all of our used vehicle inventory Repaid outstanding balance on Ally Floorplan Facility Reducing our outstanding commitments and executing a reduction-in-force commensurate with our reduced operations Tom Shortt, the Company’s Chief Executive Officer, said “As we previously announced, in January 2024 Vroom’s Board of Directors approved a Value Maximization Plan pursuant to which the Company has discontinued its ecommerce operations and is winding down its used vehicle dealership business. I am incredibly proud of the commitment and professionalism demonstrated by our team as they execute an orderly wind down of our ecommerce operations with a focus on timeliness and cost effectiveness. We anticipate that the wind-down will be substantially complete by the end of the month and look forward to working to maximize stakeholder value through our remaining businesses, United Auto Credit and CarStory.” (1) While the Value Maximization Plan was approved in January 2024, we determined a triggering event existed as of December 31, 2023 related to our long lived assets, which led to additional write-downs of inventory in the fourth quarter of 2023. FOURTH QUARTER 2023 FINANCIAL DISCUSSION All financial comparisons are on a year-over-year basis unless otherwise noted. Ecommerce Results Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands, except unit data and average days to sale) (in thousands, except unit data and average days to sale) Ecommerce units sold 4,780 4,144 636 15.3 % 17,401 39,278 (21,877 ) (55.7 )% Ecommerce revenue: Vehicle revenue $ 136,360 $ 131,069 $ 5,291 4.0 % $ 523,945 $ 1,304,797 $ (780,852 ) (59.8 )% Product revenue 16,101 10,689 5,412 50.6 % 52,225 59,398 (7,173 ) (12.1 )% Total ecommerce revenue $ 152,461 $ 141,758 $ 10,703 7.6 % $ 576,170 $ 1,364,195 $ (788,025 ) (57.8 )% Ecommerce gross profit: Vehicle gross profit $ 7,387 $ (5,579 ) $ 12,966 232.4 % $ 10,343 $ 40,575 $ (30,232 ) (74.5 )% Product gross profit 15,281 10,689 4,592 43.0 % 48,888 59,398 (10,510 ) (17.7 )% Total ecommerce gross profit $ 22,668 $ 5,110 $ 17,558 343.6 % $ 59,231 $ 99,973 $ (40,742 ) (40.8 )% Average vehicle selling price per ecommerce unit $ 28,527 $ 31,629 $ (3,102 ) (9.8 )% $ 30,110 $ 33,220 $ (3,110 ) (9.4 )% Product revenue per ecommerce unit 3,368 2,579 789 30.6 % 3,001 1,512 1,489 98.5 % Gross profit per ecommerce unit: Vehicle gross profit per ecommerce unit $ 1,545 $ (1,346 ) $ 2,891 214.8 % $ 594 $ 1,033 $ (439 ) (42.5 )% Product gross profit per ecommerce unit 3,197 2,579 618 24.0 % 2,809 1,512 1,297 85.8 % Total gross profit per ecommerce unit $ 4,742 $ 1,233 $ 3,509 284.6 % $ 3,403 $ 2,545 $ 858 33.7 % Ecommerce average days to sale 135 244 (109 ) (44.7 )% 217 131 86 65.6 % Results by Segment Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands, except unit data) (in thousands, except unit data) Units: Ecommerce 4,780 4,144 636 15.3 % 17,401 39,278 (21,877 ) (55.7 )% Wholesale 1,821 1,768 53 3.0 % 7,094 20,876 (13,782 ) (66.0 )% All Other (1) 337 350 (13 ) (3.7 )% 1,359 3,758 (2,399 ) (63.8 )% Total units 6,938 6,262 676 10.8 % 25,854 63,912 (38,058 ) (59.5 )% Revenue: Ecommerce $ 152,461 $ 141,758 $ 10,703 7.6 % $ 576,170 $ 1,364,195 $ (788,025 ) (57.8 )% Wholesale 28,526 23,039 5,487 23.8 % 104,119 293,528 (189,409 ) (64.5 )% Retail Financing (2) 41,999 32,537 9,462 29.1 % 156,938 152,542 4,396 2.9 % All Other (3) 12,938 12,015 923 7.7 % 55,976 138,636 (82,660 ) (59.6 )% Total revenue $ 235,924 $ 209,349 $ 26,575 12.7 % $ 893,203 $ 1,948,901 $ (1,055,698 ) (54.2 )% Gross profit (loss): Ecommerce $ 22,668 $ 5,110 $ 17,558 343.6 % $ 59,231 $ 99,973 $ (40,742 ) (40.8 )% Wholesale (28,927 ) (4,359 ) (24,568 ) 563.6 % (34,353 ) (10,620 ) (23,733 ) 223.5 % Retail Financing (2) 33,427 28,744 4,683 16.3 % 125,610 138,381 (12,771 ) (9.2 )% All Other (3) 1,879 (36 ) 1,915 5,319.4 % 11,459 17,053 (5,594 ) (32.8 )% Total gross profit $ 29,047 $ 29,459 $ (412 ) (1.4 )% $ 161,947 $ 244,787 $ (82,840 ) (33.8 )% Gross profit (loss) per unit (4): Ecommerce $ 4,742 $ 1,233 $ 3,509 284.6 % $ 3,403 $ 2,545 $ 858 33.7 % Wholesale $ (15,885 ) $ (2,465 ) $ (13,420 ) 544.4 % $ (4,843 ) $ (509 ) $ (4,334 ) 851.5 % (1) All Other units consist of retail sales of used vehicles from TDA. (2) The Retail Financing segment represents UACC’s operations with its network of third-party dealership customers as of the closing of the UACC acquisition in February 2022. (3) All Other revenues and gross profit consist of retail sales of used vehicles from TDA and fees earned on sales of value-added products associated with those vehicles sales and the CarStory business. (4) Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit. SG&A Three Months Ended December 31, Year Ended December 31, 2023 2022 Change % Change 2023 2022 Change % Change (in thousands) (in thousands) Compensation & benefits $ 35,738 $ 52,043 $ (16,305 ) (31.3 )% $ 166,056 $ 251,153 $ (85,097 ) (33.9 )% Marketing expense 8,570 9,852 (1,282 ) (13.0 )% 48,440 79,670 (31,230 ) (39.2 )% Outbound logistics 2,215 (902 ) 3,117 345.6 % 8,466 39,023 (30,557 ) (78.3 )% Occupancy and related costs 4,410 5,955 (1,545 ) (25.9 )% 18,010 23,363 (5,353 ) (22.9 )% Professional fees 4,625 6,870 (2,245 ) (32.7 )% 20,129 33,455 (13,326 ) (39.8 )% Software and IT costs 8,912 11,164 (2,252 ) (20.2 )% 36,466 44,570 (8,104 ) (18.2 )% Other 13,109 5,778 7,331 126.9 % 43,090 95,153 (52,063 ) (54.7 )% Total selling, general & administrative expenses $ 77,579 $ 90,760 $ (13,181 ) (14.5 )% $ 340,657 $ 566,387 $ (225,730 ) (39.9 )% 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; Adjusted EBITDA; Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues; Adjusted EBITDA excluding securitization gain; and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues. 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, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because each of these non-GAAP financial measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. EBITDA We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense. Adjusted EBITDA We calculate Adjusted EBITDA as EBITDA adjusted to exclude severance costs, gain on debt extinguishment, severe weather-related costs, long-lived asset impairment charges, goodwill impairment charge, realignment costs, acquisition related costs, and the acceleration of non-cash stock-based compensation. Changes in fair value of financial instruments can fluctuate significantly from period to period and previously related primarily to historical finance receivables and debt which have been securitized, and acquired on February 1, 2022 from UACC. As a result of current market conditions, the financial instruments related to the 2022-2 and 2023-1 securitization transactions are recognized on balance-sheet and accounted for under the fair value option. See Note 17 — Financial Instruments and Fair Value Measurements to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. As a result, the majority of our finance receivables are now carried at fair value and a significant portion of the risk of loss associated with these finance receivables have been retained by UACC. We therefore have determined we will no longer make any adjustments for such fluctuations in fair value to our Adjusted EBITDA results. We have recast the prior period presented to conform to current period presentation. We may account for future securitizations as on balance sheet transactions depending on the market conditions. Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues We calculate Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the non-recurring costs incurred to address operational and customer experience issues, including rental cars for our customers and legal settlements with customers and state DMVs. Adjusted EBITDA excluding securitization gain We calculate Adjusted EBITDA excluding securitization gain as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC's finance receivables, and believe that it provides a useful perspective on the underlying operating results and trends and a means to compare our period-over-period results. Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues We calculate Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables and the non-recurring costs incurred to address operational and customer experience issues. The following table presents a reconciliation of the foregoing non-GAAP financial measures to net loss, which is the most directly comparable U.S. GAAP measure: Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 (in thousands) (in thousands) Net loss $ (141,321 ) $ 24,765 $ (365,540 ) $ (451,910 ) Adjusted to exclude the following: Interest expense 14,530 12,076 45,445 40,693 Interest income (4,789 ) (6,372 ) (21,158 ) (19,363 ) Provision (benefit) for income taxes (303 ) 2,405 615 (19,680 ) Depreciation and amortization 11,055 10,702 43,476 38,707 EBITDA $ (120,828 ) $ 43,576 $ (297,162 ) $ (411,553 ) Severance costs $ 48 $ — $ 6,703 $ — Gain on debt extinguishment (18,238 ) (126,767 ) (37,878 ) (164,684 ) Hail storm costs — — 2,353 — Long-lived asset impairment charges 47,396 3,679 48,748 5,806 Goodwill impairment charge — — — 201,703 Realignment costs — 2,253 — 15,025 Acquisition related costs — — — 5,653 Acceleration of non-cash stock-based compensation — 2,439 — 2,439 Adjusted EBITDA $ (91,622 ) $ (74,820 ) $ (277,236 ) $ (345,611 ) Non-recurring costs to address operational and customer experience issues 3,247 374 4,065 25,433 Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (74,446 ) $ (273,171 ) $ (320,178 ) Securitization gain — — — (45,589 ) Adjusted EBITDA excluding securitization gain $ (91,622 ) $ (74,820 ) $ (277,236 ) $ (391,200 ) Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (74,446 ) $ (273,171 ) $ (365,767 ) FOURTH QUARTER 2023 AS COMPARED TO THIRD QUARTER 2023 Three Months Ended December 31, Three Months Ended September 30, 2023 2023 Change % Change (in thousands, except unit data) Total revenues $ 235,924 $ 235,634 $ 290 0.1 % Total gross profit $ 29,047 $ 48,094 $ (19,047 ) (39.6 )% Ecommerce units sold 4,780 4,561 219 4.8 % Ecommerce revenue $ 152,461 $ 149,851 $ 2,610 1.7 % Ecommerce gross profit $ 22,668 $ 14,339 $ 8,329 58.1 % Vehicle gross profit (loss) per ecommerce unit $ 1,545 $ 516 $ 1,029 199.4 % Product gross profit per ecommerce unit 3,197 2,628 569 21.7 % Total gross profit per ecommerce unit $ 4,742 $ 3,144 $ 1,598 50.8 % Wholesale units sold 1,821 2,270 (449 ) (19.8 )% Wholesale revenue $ 28,526 $ 30,898 $ (2,372 ) (7.7 )% Wholesale gross (loss) profit $ (28,927 ) $ (1,495 ) $ (27,432 ) 1,834.9 % Wholesale gross (loss) profit per unit $ (15,885 ) $ (659 ) $ (15,226 ) 2,310.5 % Retail Financing revenue $ 41,999 $ 40,823 $ 1,176 2.9 % Retail Financing gross profit $ 33,427 $ 32,341 $ 1,086 3.4 % Total selling, general, and administrative expenses $ 77,579 $ 79,586 $ (2,007 ) (2.5 )% Three Months Ended December 31, Three Months Ended September 30, 2023 2023 Change % Change (in thousands) Net loss $ (141,321 ) $ (82,857 ) $ (58,464 ) 70.6 % Adjusted to exclude the following: Interest expense 14,530 12,058 2,472 20.5 % Interest income (4,789 ) (5,506 ) 717 13.0 % Provision for income taxes (303 ) 260 (563 ) (216.5 )% Depreciation and amortization 11,055 11,248 (193 ) (1.7 )% EBITDA $ (120,828 ) $ (64,797 ) $ (56,031 ) 86.5 % Severance costs $ 48 $ 274 $ (226 ) (82.4 )% Gain on debt extinguishment (18,238 ) — (18,238 ) (100.0 )% Long-lived asset impairment charges 47,396 — 47,396 100.0 % Adjusted EBITDA $ (91,622 ) $ (64,523 ) $ (27,099 ) 42.0 % Non-recurring costs to address operational and customer experience issues 3,247 32 3,215 10,047.2 % Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (64,491 ) $ (23,884 ) (37.0 )% Securitization gain — — — 0.0 % Adjusted EBITDA excluding securitization gain $ (91,622 ) $ (64,523 ) $ (27,099 ) 42.0 % Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues $ (88,375 ) $ (64,491 ) $ (23,884 ) 37.0 % Liquidity Outlook We expect year-end 2024 cash and cash equivalents in the range of $35.0 to $65.0 million. The foregoing estimate is a forward-looking statement that reflects the Company’s expectation as of March 13, 2024 and is subject to substantial uncertainty. See “Forward-Looking Statements” below. 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 is winding down its 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, any anticipated costs and charges related to the Value Maximization Plan and the anticipated timeline of such costs, charges, implementation or completion of the Value Maximization Plan, our expectations regarding United Auto Credit Corporation and CarStory; our ability to successfully wind down and halt our ecommerce operations, 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, 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 December 31, 2023 2022 ASSETS Current Assets: Cash and cash equivalents $ 135,585 $ 398,915 Restricted cash (including restricted cash of consolidated VIEs of $49.1 million and $24.7 million, respectively) 73,234 73,095 Accounts receivable, net of allowance of $11.2 million and $21.5 million, respectively 9,139 13,967 Finance receivables at fair value (including finance receivables of consolidated VIEs of $11.8 million and $11.5 million, respectively) 12,501 12,939 Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $457.2 million and $305.9 million, respectively) 503,546 321,626 Inventory 163,250 320,648 Beneficial interests in securitizations 4,485 20,592 Prepaid expenses and other current assets (including other current assets of consolidated VIEs of $25.2 million and $11.7 million, respectively) 50,899 58,327 Total current assets 952,639 1,220,109 Finance receivables at fair value (including finance receivables of consolidated VIEs of $329.6 million and $119.6 million, respectively) 336,169 140,235 Property and equipment, net 24,132 50,201 Intangible assets, net 131,892 158,910 Operating lease right-of-use assets 7,063 23,568 Other assets (including other assets of consolidated VIEs of $1.8 million and $0 million, respectively) 23,527 26,004 Total assets $ 1,475,422 $ 1,619,027 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 26,762 $ 34,702 Accrued expenses (including accrued expenses of consolidated VIEs of $4.0 million and $1.5 million, respectively) 52,452 76,795 Vehicle floorplan 151,178 276,988 Warehouse credit facilities of consolidated VIEs 421,268 229,518 Current portion of long-term debt (including current portion of securitization debt of consolidated VIEs at fair value of $163.5 million and $47.2 million, respectively) 172,410 47,239 Deferred revenue 14,025 10,655 Operating lease liabilities, current 8,737 9,730 Other current liabilities 9,974 17,693 Total current liabilities 856,806 703,320 Long-term debt, net of current portion (including securitization debt of consolidated VIEs of $150.6 million and $32.6 million at fair value, respectively) 454,173 402,154 Operating lease liabilities, excluding current portion 25,183 20,129 Other long-term liabilities (including other long-term liabilities of consolidated VIEs of $10.4 million and $7.4 million, respectively) 17,109 18,183 Total liabilities 1,353,271 1,143,786 Commitments and contingencies (Note 14) Stockholders’ equity: Common stock, $0.001 par value; 500,000,000 shares authorized as of December 31, 2023 and 2022; 1,791,286 and 1,727,525 shares issued and outstanding as of December 31, 2023 and 2022, respectively 2 2 Additional paid-in-capital 2,088,381 2,075,931 Accumulated deficit (1,966,232 ) (1,600,692 ) Total stockholders’ equity 122,151 475,241 Total liabilities and stockholders’ equity $ 1,475,422 $ 1,619,027 VROOM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Revenue: Retail vehicle, net $ 146,424 $ 142,579 $ 565,972 $ 1,425,842 Wholesale vehicle 28,526 23,039 104,119 293,528 Product, net 15,754 10,793 52,253 62,747 Finance 41,999 32,537 156,938 152,542 Other 3,221 401 13,921 14,242 Total revenue 235,924 209,349 893,203 1,948,901 Cost of sales: Retail vehicle 138,648 147,867 553,565 1,382,005 Wholesale vehicle 57,453 27,399 138,472 304,148 Product 819 — 3,337 — Finance 8,573 3,793 31,328 14,161 Other 1,384 831 4,554 3,800 Total cost of sales 206,877 179,890 731,256 1,704,114 Total gross profit 29,047 29,459 161,947 244,787 Selling, general and administrative expenses 77,579 90,760 340,657 566,387 Depreciation and amortization 10,924 10,562 42,769 38,290 Impairment charges 47,395 5,746 48,748 211,873 Loss from operations (106,851 ) (77,609 ) (270,227 ) (571,763 ) Gain on debt extinguishment (18,238 ) (126,767 ) (37,878 ) (164,684 ) Interest expense 14,530 12,076 45,445 40,693 Interest income (4,789 ) (6,372 ) (21,158 ) (19,363 ) Other loss, net 43,270 16,284 108,289 43,181 (Loss) income before provision for income taxes (141,624 ) 27,170 (364,925 ) (471,590 ) (Benefit) provision for income taxes (303 ) 2,405 615 (19,680 ) Net (loss) income $ (141,321 ) $ 24,765 $ (365,540 ) $ (451,910 ) Net (loss) income per share attributable to common stockholders, basic $ (80.51 ) $ 14.34 $ (209.70 ) $ (262.15 ) Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders, basic 1,755,387 1,727,203 1,743,128 1,723,843 Net (loss) income per share attributable to common stockholders, diluted $ (80.51 ) $ 13.52 $ (209.70 ) $ (262.15 ) Weighted-average number of shares outstanding used to compute net (loss) income per share attributable to common stockholders, diluted 1,755,387 1,832,223 1,743,128 1,723,843 VROOM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Year Ended December 31, 2023 2022 Operating activities Net loss $ (365,540 ) $ (451,910 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment charges 48,748 211,873 Gain on debt extinguishment (37,878 ) (164,684 ) Depreciation and amortization 43,476 38,707 Amortization of debt issuance costs 4,598 4,809 Realized gains on securitization transactions — (45,589 ) Deferred taxes — (23,855 ) Losses on finance receivables and securitization debt, net 114,702 66,839 Stock-based compensation expense 10,051 11,957 Provision to record inventory at lower of cost or net realizable value (2,360 ) 1,812 Provision for bad debt 4,074 13,406 Provision to record finance receivables held for sale at lower of cost or fair value 20,566 6,541 Amortization of unearned discounts on finance receivables at fair value (25,954 ) (14,593 ) Other, net (17,393 ) (7,512 ) Changes in operating assets and liabilities: Finance receivables, held for sale Originations of finance receivables held for sale (582,170 ) (625,575 ) Principal payments received on finance receivables held for sale 105,858 64,521 Proceeds from sale of finance receivables held for sale, net — 509,612 Other (1,606 ) (7,701 ) Accounts receivable 754 78,060 Inventory 159,758 403,924 Prepaid expenses and other current assets 22,711 4,146 Other assets 3,266 (2,546 ) Accounts payable (7,940 ) (24,281 ) Accrued expenses (24,766 ) (53,553 ) Deferred revenue 3,370 (65,148 ) Other liabilities (10,009 ) (38,325 ) Net cash used in operating activities (533,684 ) (109,065 ) Investing activities Finance receivables at fair value Purchases of finance receivables at fair value (3,392 ) (56,484 ) Principal payments received on finance receivables at fair value 174,748 132,391 Proceeds from sale of finance receivables at fair value, net — 43,262 Consolidation of VIEs 11,409 — Principal payments received on beneficial interests 5,193 8,341 Purchase of property and equipment (14,805 ) (24,234 ) Acquisition of business, net of cash acquired of $47.9 million — (267,488 ) Net cash provided by (used in) investing activities 173,153 (164,212 ) Financing activities Proceeds from the issuance of common stock in at-the-market offering, net of offering costs 2,399 — Proceeds from borrowings under secured financing agreements 261,991 — Principal repayment under secured financing agreements (208,476 ) (192,839 ) Proceeds from financing of beneficial interests in securitizations 24,506 — Principal repayments of financing of beneficial interests in securitizations (8,698 ) — Proceeds from vehicle floorplan 559,331 1,403,042 Repayments of vehicle floorplan (685,141 ) (1,638,855 ) Proceeds from warehouse credit facilities 480,100 520,800 Repayments of warehouse credit facilities (290,483 ) (467,216 ) Repurchases of convertible senior notes (36,536 ) (90,208 ) Other financing activities (1,653 ) (4,212 ) Net cash provided by (used in) financing activities 97,340 (469,488 ) Net (decrease) increase in cash, cash equivalents and restricted cash (263,191 ) (742,765 ) Cash, cash equivalents and restricted cash at the beginning of period 472,010 1,214,775 Cash, cash equivalents and restricted cash at the end of period $ 208,819 $ 472,010 VROOM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) (unaudited) Supplemental disclosure of cash flow information: Cash paid for interest $ 59,351 $ 34,907 Cash paid for income taxes $ 5,363 $ 2,409 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 $ — Fair value of beneficial interests received in securitization transactions $ — $ 30,082 View source version on businesswire.com: https://www.businesswire.com/news/home/20240313922393/en/