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Vroom Announces Fourth Quarter and Full Year 2023 Results

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

 

 

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