PARTS iD, Inc. (NYSE American: ID) (“PARTS iD” or “Company”),
the owner and operator of, among other verticals, “CARiD.com,” a
leading digital commerce platform for the automotive aftermarket,
today announced results for the first quarter ended March 31,
2022.
First Quarter 2022 Financial Summary (Comparisons versus
First Quarter 2021 and 2020*)
- Net revenue was $94.9 million, a decrease of 13.0% compared to
2021 and an increase of 34.2% compared to 2020.
- Gross margin was 19.5% as compared to 20.9% in 2021 and 21.4%
in 2020.
- Operating expenses as a percent of net revenue were 24.6% as
compared to 21.7% in 2021 and 23.1% in 2020.
- Operating loss was $(4.8) million as compared to $(0.8) million
in 2021 and $(1.1) million in 2020.
- Net loss was $(4.0) million as compared to $(0.6) million in
2021 and $(0.8) million in 2020.
- Adjusted EBITDA was $(1.7) million compared to $1.2 million in
2021.
*Note: The Company has included comparisons against the first
quarter of 2020 since consumer demand in the first quarter of 2021
was significantly impacted by COVID-19 and stimulus payments.
Management Commentary
“Our first quarter revenue compared to 2020 underscores the
progress we have made expanding our business inclusive of the lift
we experienced from the tailwind related to record stimulus in
early 2021,” said Nino Ciappina, Chief Executive Officer of PARTS
iD. “In addition to the difficult year-over-year comparison,
macroeconomic factors and global supply chain disruptions are
impacting our current results. Despite the challenging operating
environment, we remain focused on executing the initiatives aimed
at strengthening our customer relationships, broadening our product
and service offerings, and increasing brand awareness.”
The first quarter financial results show a continuation of the
Company’s investment designed to increase revenue of its adjacent
verticals, original equipment, and repair parts businesses. While
these investments in the short term reduced overall margin,
management remains confident that the opportunities in these
markets bode well for long-term growth and profitability. To this
end, during the first quarter of 2022, among other achievements,
the Company further expanded its product catalog and established
new direct-to-manufacturer relationships. In addition, the Company
increased margins by 15.1% in the adjacent verticals and by 6.2% in
repair parts and original equipment and enriched its fitment data
in these categories. Furthermore, to complement its existing
strength in the DIY segment, the Company continues to build an
omnichannel customer experience to attract customers in the $225+
billion do-it-for-me (DIFM) segment of the industry by adding over
5,000 new locations to its tire installation network, a
foundational step in capturing the DIFM market.
First Quarter 2022 Financial Results
First quarter 2022 revenue decreased 13.0% to $94.9 million,
compared to $109.1 in the first quarter of 2021. This decrease was
attributable to a 14.9% decline in traffic and a 13.9% decrease in
the conversion rate, partially offset by a 9.4% increase in average
order value.
Gross profit for the first quarter of 2022 decreased to $18.5
million compared to $22.8 million in the same prior year period.
Gross margin was 19.5% for the first quarter of 2022 compared to
20.9% in the first quarter of 2021. The decrease in gross margin
was attributable to a year-over-year increase in product and
shipping costs associated with the ongoing global supply chain
disruptions and change in the product category revenue mix.
Operating expenses were $23.3 million for the first quarter of
2022 compared to $23.6 million for the first quarter of 2021. The
decrease in operating expenses was primarily attributable to $0.8
million decline in advertising expenses due to lower traffic and
clicks, along with a $0.3 million decrease in public company costs
and a $0.3 million decrease in merchant services provider
processing fees, partially offset by a $0.8 million increase in
non-cash share-based expenses. Operating expenses as a percent of
net revenue were 24.6% compared to 21.7% in the same prior year
period.
Operating loss for the first quarter of 2022 was $(4.8) million
compared to $(0.8) million for the first quarter of 2021.
Net loss for the first quarter of 2022 was $(4.0) million
compared to a net loss of $(0.6) million in the same prior year
period.
Adjusted EBITDA was $(1.7) million in the first quarter of 2022
compared to $1.2 million in the same prior year period.
Balance Sheet
As of March 31, 2022, the company had cash of $15.8 million
compared to $23.2 million at December 31, 2021. The decrease in
cash was primarily driven by net cash used in operating activities
of $5.5 million and cash used in investing activities of $1.9
million, primarily related to website and software development
expenditures.
Conference Call
PARTS iD’s Chief Executive Officer, Nino Ciappina, and Chief
Financial Officer, Kailas Agrawal, will host a live conference call
to discuss financial results on May 10, 2022 at 4:30 p.m. Eastern
Time. Investors and analysts interested in participating in the
call are invited to dial (877) 407-9129 (domestic) or (201)
493-6753 (international).
The conference call will also be available to interested parties
through a live webcast at https://www.partsidinc.com/. A telephone
replay of the call will be available until May 24, 2022, by dialing
(877) 660-6853 (domestic) or (201) 612-7415(international) and
entering the conference identification number: 13729670.
In addition, the investor presentation to be reviewed during the
call will be posted on the Company’s website at
https://www.partsidinc.com.
About PARTS iD, Inc.
PARTS iD is a technology-driven, digital commerce company
focused on creating custom infrastructure and unique user
experiences within niche markets. Founded in 2008 with a vision of
creating a one-stop eCommerce destination for the automotive parts
and accessories market, we believe that PARTS iD has since become a
market leader and proven brand-builder, fueled by its commitment to
delivering a revolutionary shopping experience; comprehensive,
accurate and varied product offerings; and continued digital
commerce innovation.
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures that
differ from financial measures calculated in accordance with U.S.
generally accepted accounting principles (“GAAP”). These non-GAAP
financial measures may not be comparable to similar measures
reported by other companies and should be considered in addition
to, and not as a substitute for, or superior to, other measures
prepared in accordance with GAAP. Management uses non-GAAP
financial measures internally to evaluate the performance of the
business. Additionally, management believes certain non-GAAP
measures provide meaningful incremental information to investors to
consider when evaluating the performance of the Company.
To this end, we provide EBITDA and Adjusted EBITDA, which are
non-GAAP financial measures. EBITDA consists of net income (loss)
plus (a) interest expense; (b) income tax provision (or less
benefit); and (c) depreciation expense. Adjusted EBITDA consists of
EBITDA plus stock compensation expense and other costs, fees,
expenses, write offs and other items that do not impact the
fundamentals of our operations, as described further below
following the reconciliation of these metrics. Management believes
these non-GAAP measures provide useful information to investors in
their assessment of the performance of our business. The exclusion
of certain expenses in calculating EBITDA and Adjusted EBITDA
facilitates operating performance comparisons on a period-to-period
basis as these costs may vary independent of business performance.
Accordingly, we believe that EBITDA and Adjusted EBITDA provide
useful information to investors and others in understanding and
evaluating our operating results in the same manner as our
management and board of directors.
EBITDA and Adjusted EBITDA have limitations as an analytical
tool, and you should not consider these measures in isolation or as
a substitute for analysis of our results as reported under GAAP.
Some of these limitations are:
- Although depreciation is a non-cash charge, the assets being
depreciated may have to be replaced in the future, and EBITDA and
Adjusted EBITDA do not reflect cash capital expenditure
requirements for such replacements or for new capital expenditure
requirements;
- EBITDA and Adjusted EBITDA do not reflect changes in our
working capital;
- EBITDA and Adjusted EBITDA do not reflect income tax payments
that may represent a reduction in cash available to us;
- EBITDA and Adjusted EBITDA do not reflect depreciation and
interest expenses associated with the lease financing obligations;
and
- Other companies, including companies in our industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
Because of these limitations, you should consider EBITDA and
Adjusted EBITDA alongside other financial performance measures,
including various cash flow metrics, net income (loss) and our
other GAAP results.
Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measures are included in this
press release.
Cautionary Note Regarding Forward-Looking Statements
All statements made in this press release relating to future
financial or business performance, conditions, plans, prospects,
trends, or strategies and other such matters, including without
limitation, expected future performance, consumer adoption,
anticipated success of our business model or the potential for long
term profitable growth, are forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995. In addition, when or if used in this press release, the words
“may,” “could,” “should,” “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “predict,” “potential,” “confident,”
“look forward,” “optimistic” and similar expressions and their
variants, as they relate to us may identify forward-looking
statements. We operate in a changing environment where new risks
emerge from time to time and it is not possible for us to predict
all risks that may affect us, particularly those associated with
the COVID-19 pandemic and the conflict in Ukraine, which have had
wide-ranging and continually evolving effects. We caution that
these forward-looking statements are subject to numerous
assumptions, risks, and uncertainties, which change over time,
often quickly and in unanticipated ways.
Important factors that may cause actual results to differ
materially from the results discussed in the forward-looking
statements include risks and uncertainties, including without
limitation: the ongoing conflict between Ukraine and Russia has
affected and may continue to affect our business; competition and
our ability to counter competition, including changes to the
algorithms of Google and other search engines and related impacts
on our revenue and advertisement expenses; the impact of health
epidemics, including the COVID-19 pandemic, on our business and the
actions we may take in response thereto; disruptions in the supply
chain and associated impacts on demand, product availability, order
cancellations and cost of goods sold including inflation;
difficulties in managing our international business operations,
particularly in the Ukraine, including with respect to enforcing
the terms of our agreements with our contractors and managing
increasing costs of operations; changes in our strategy, future
operations, financial position, estimated revenues and losses,
product pricing, projected costs, prospects and plans; the outcome
of actual or potential litigation, complaints, product liability
claims, or regulatory proceedings, and the potential adverse
publicity related thereto; the implementation, market acceptance
and success of our business model, expansion plans, opportunities
and initiatives, including the market acceptance of our planned
products and services; developments and projections relating to our
competitors and industry; our expectations regarding our ability to
obtain and maintain intellectual property protection and not
infringe on the rights of others; our ability to maintain and
enforce intellectual property rights and ability to maintain
technology leadership; our future capital requirements; our ability
to raise capital and utilize sources of cash; our ability to obtain
funding for our operations; changes in applicable laws or
regulations; the effects of current and future U.S. and foreign
trade policy and tariff actions; disruptions in the marketplace for
online purchases of aftermarket auto parts; costs related to
operating as a public company; and the possibility that we may be
adversely affected by other economic, business, and/or competitive
factors.
Further information on the factors and risks that could cause
actual results to differ from any forward-looking statements are
contained in our filings with the United States Securities and
Exchange Commission (SEC), which are available at
https://www.sec.gov (or at https://www.partsidinc.com). The
forward-looking statements represent our estimates as of the date
hereof only, and we specifically disclaim any duty or obligation to
update forward-looking statements.
PARTS iD, INC.
Condensed Consolidated Balance
Sheets
As of March 31, 2022 and
December 31, 2021
March 31, 2022 (Unaudited)
December 31, 2021
ASSETS
Current assets
Cash
$
15,827,503
$
23,203,230
Accounts receivable
3,090,131
2,157,108
Inventory
5,972,282
5,754,748
Prepaid expenses and other current
assets
5,534,506
4,874,704
Total current assets
30,424,422
35,989,790
Property and equipment, net
14,024,686
13,700,876
Intangible assets
262,966
262,966
Deferred tax assets
3,195,973
2,314,907
Operating lease right-of-use
1,074,390
-
Other assets
267,707
267,707
Total assets
$
49,250,144
$
52,536,246
LIABILITIES AND SHAREHOLDERS’
DEFICIT
Current liabilities
Accounts payable
$
35,606,725
$
40,591,938
Customer deposits
17,941,597
15,497,857
Accrued expenses
6,948,508
6,221,330
Other current liabilities
4,046,351
3,930,841
Operating lease liabilities
680,173
-
Total current liabilities
65,223,354
66,241,966
Other non-current liabilities
Operating lease, net of current
portion
394,217
-
Total liabilities
65,617,571
66,241,966
SHAREHOLDERS’ DEFICIT
Preferred stock, $0.0001 par value per
share;
1,000,000 shares authorized and 0 issued
and outstanding
-
-
Common stock, $0.0001 par value per
share;
10,000,000 Class F shares authorized and 0
issued and outstanding
-
-
100,000,000 Class A shares authorized and
33,965,804 issued and outstanding, as of March 31, 2022 and
December 31, 2021
3,396
3,396
Additional paid in capital
8,265,021
6,973,541
Accumulated deficit
(24,635,844
)
(20,682,657
)
Total shareholders’ deficit
(16,367,427
)
(13,705,720
)
Total liabilities and shareholders’
deficit
$
49,250,144
$
52,536,246
PARTS iD, INC.
Condensed Consolidated
Statements of Operations
For the three months ended
March 31, 2022 and 2021 (Unaudited)
Three Months Ended March 31,
2022
Three Months Ended March 31,
2021
Net revenue
$
94,892,148
$
109,073,628
Cost of goods sold
76,397,920
86,240,019
Gross profit
18,494,228
22,833,609
Operating expenses:
Advertising
9,701,292
10,499,386
Selling, general and administrative
11,672,727
11,358,707
Depreciation
1,954,462
1,773,773
Total operating expenses
23,328,481
23,631,866
Loss from operations
(4,834,253
)
(798,257
)
Interest expense
-
6,490
Loss before income tax benefit
(4,834,253
)
(804,747
)
Income tax benefit
(881,066
)
(159,934
)
Net loss
$
(3,953,187
)
$
(644,813
)
Loss per common share
Loss per share (basic and diluted)
$
(0.12
)
$
(0.02
)
Weighted average number of shares (basic
and diluted)
33,965,804
32,873,457
PARTS iD, INC.
Condensed Consolidated
Statements of Cash Flows
For the three months ended
March 31, 2022 and 2021 and 2020 (Unaudited)
Three Months Ended March 31,
2022
Three Months Ended March 31,
2021
Cash Flows from Operating Activities:
Net loss
$
(3,953,187
)
$
(644,813
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation
1,954,462
1,773,773
Deferred tax benefit
(881,066
)
-
Amortization of right-of-use-assets
248,391
-
Share based compensation expense
867,370
28,824
Changes in operating assets and
liabilities:
Accounts receivable
(933,023
)
(1,812,046
)
Inventory
(217,534
)
(3,399,458
)
Prepaid expenses and other current
assets
(659,802
)
1,717,564
Accounts payable
(4,985,213
)
5,641,863
Customer deposits
2,443,740
11,080,694
Accrued expenses
727,178
1,298,977
Operating lease liabilities
(248,391
)
-
Other current liabilities
115,510
1,332,584
Net cash (used in) provided by operating
activities
(5,521,565
)
17,017,962
Cash Flows from Investing Activities:
Purchase of property and equipment
(16,200
)
(13,099
)
Website and software development costs
(1,837,962
)
(1,759,175
)
Net cash used in investing activities
(1,854,162
)
(1,772,274
)
Cash Flows from Financing Activities:
Principal paid on notes payable
-
(5,156
)
Net cash used in financing activities
-
(5,156
)
Net change in cash
(7,375,727
)
15,240,532
Cash, beginning of period
23,203,230
22,202,706
Cash, end of period
$
15,827,503
$
37,443,238
Supplemental disclosure of cash flows
information:
Operating cash outflow from operating
leases
$
249,838
$
-
Cash paid for interest
$
-
$
6,490
Cash paid for income taxes
$
-
$
4,000
The following table reflects the reconciliation of net income
(loss) to EBITDA and Adjusted EBITDA for each of the periods
indicated.
Three months ended March 31,
2022
2021
Net loss
$
(3,953,187
)
$
(644,813
)
Interest expense
-
6,490
Income tax benefit
(881,066
)
(159,934
)
Depreciation
1,954,462
1,773,773
EBITDA
(2,879,791
)
975,516
Stock compensation expense included in
statement of operations
867,370
28,824
Legal & settlement expenses (1)
311,998
243,426
Adjusted EBITDA Total
$
(1,700,423
)
$
1,247,766
% of revenue
(1.8
)%
1.3
%
(1) Represents legal and settlement expenses related to
significant matters that do not impact the fundamentals of our
operations, pertaining to: (i) causes of action between certain of
the Company’s shareholders and which involves claims directly
against the Company seeking the fulfillment of alleged
indemnification obligations with respect to these matters, and (ii)
trademark and IP protection cases. We are involved in routine IP
litigation, commercial litigation and other various litigation
matters. We review litigation matters from both a qualitative and
quantitative perspective to determine if excluding the losses or
gains will provide our investors with useful incremental
information. Litigation matters can vary in their characteristics,
frequency and significance to our operating results.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510006015/en/
Investors: Brendon Frey ICR ir@partsidinc.com
Media Erin Hadden FischTank PR
partsid@fischtankpr.com
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