LMP Automotive Holdings, Inc. Announces First Quarter 2020 Financial Results
Revenue Increased 76% Quarter to Quarter
Gross Profits Increased 50%
Cash and Shareholder Equity Increased to over $18M and $32M Respectively Quarter to Quarter
PLANTATION, FL / ACCESSWIRE / May 14, 2020 / LMP Automotive Holdings, Inc. (LMPX) (the "Company"), an e-commerce and facilities-based platform for consumers who desire to buy, sell, rent, subscribe for or finance pre-owned and new automobiles, today announced it will report its first-quarter 2020 financial results for the period ended March 31, 2020. As previously announced, management will hold a conference call at 5:30 p.m. ET to review and discuss the Company's business and results. For more information visit: https://investors.lmpah.com.
Revenues in the first quarter increased 76% to $5.3 million as compared to the fourth quarter of 2019.
Gross profit in the first quarter increased 50% to $820,000 as compared to the fourth quarter of 2019
Adjusted EBITDA loss in the first quarter was $770,989.
Cash, shareholder equity, and current shares outstanding at the end of the first quarter was $18,023,278, $32,022,302, and 9,924,506 respectively.
Sam Tawfik, Chairman and CEO of LMP Automotive commented, "Despite the pandemic and a slowdown in business we saw in certain months in the first quarter and April of this year, we have seen a surge in business so far in the month of May. We believe this surge is due to a combination of the distribution of Payroll Protection Program checks to consumers, pent-up demand created by the shelter in place orders and leases that have or will expire shortly."
Sam Tawfik also added, "We are pleased with our historical results and current revenue run rate. If this trajectory continues, we expect strong results in the second quarter. We are also pleased with our balance sheet and cash position and think we can take advantage of opportunistic acquisitions at attractive multiples in the near future."
First Quarter 2020 Financial Discussion
Total revenue in the first quarter of 2020 increased 76% to $5.3 million, compared to $3.0 million in the fourth quarter of 2019. The growth in sequential revenue in the first quarter of 2020 was primarily driven by the increase in sales from 'sales-type' lease contracts, and increased subscription fee revenues.
Gross profit in the first quarter of 2020 increased 50% to $820,428, compared to $546,085, in the fourth quarter of 2019. The growth in sequential gross profits was driven by the gross margins recognized on sales-type lease contracts, and increased subscription fee revenues.
The Company's SG&A expenses were $1,621,594 during the three-month period ended March 31, 2020, an increase of $783,764 versus $837,830 during the three-month period ended December 31, 2019. The increase is mainly due to expenses related to payroll of approximately $261,000, insurance costs of approximately $197,000, and travel costs of approximately $167,000 associated with the Company's follow-on public offering and asset purchase in February 2020.
Acquisition, consulting, and legal expenses were $398,270 during the three months ended March 31, 2020, as compared to $99,343 during the previous three-month period ended December 31, 2019. The increase in expenses in the first quarter of 2020 is mainly due to accounting, audit, and compliance costs due to the Company's status as a public company. Additional costs were associated with potential acquisition due diligence and the Company's follow-on public offering in February 2020.
Net losses in the first quarter of 2020 totaled $ 1,720,188, or a loss of $0.18 per share, compared to a net loss of $572,195, or a loss of $0.07 per share, in the fourth quarter of 2019. Total shares outstanding as of March 31, 2020 were 9,924,506, versus 8,691,323 on December 31, 2019.
Cash totaled $18.0 million at March 31, 2020. This represented an increase of $11.5 million from $6.5 million at December 31, 2019. The increase was primarily the result of proceeds from the Company's follow-on public offering in February of 2020.
Additional First Quarter 2020 Highlights
Q1 2020 GAAP Results
Revenue of $5,349,713, an increase of $2,317,233 as compared to Q4 2019;
Subscription fees revenue of $573,722, as compared to $459,010 in Q4 2019 and $292,422 in Q1 2019;
Total gross profit of $820,428, an improvement of $274,343 as compared to Q4 2019;
Net loss of $1,720,188, an increase of $1,105,498 as compared to Q4 2019;
Inventory was $13,815,891 at the close of the first quarter of 2020;
Net loss per share of $0.18, based on weighted average shares of common stock outstanding of 9.3 million shares;
Shares of common stock outstanding at the end of the quarter was 9,924,506 shares; and
Stockholder equity at the end of the year was $32.0 million, an increase of $16.2 million from Q4 2019.
Q1 2020 non-GAAP Results
Unless otherwise noted, all financial comparisons stated below are versus Q4 2019.
Adjusted EBITDA loss was $770,989, an increase of $563,317 as compared to Q4 2019;
Subscription Leasing and Rental Margins1 in the aggregate increased from 59.4% to 91.9% as compared to Q1 2019 and from 91.2% to 91.9% as compared to Q4 2019, an improvement of 32.5 and 0.7 percentage points, respectively; and
Vehicle Sales Margins1 increased from -0.1% to 5.1% as compared to Q1 2019 and from 4.0% to 5.1% as compared to Q4 2019, an improvement of 5.3 and 1.1 percentage points, respectively.
2020 Outlook
The Company believes its strong balance sheet of which a significant amount is in cash, zero corporate debt, online-centric platform and strategy and cost cutting efforts position the Company for continued performance of its business model in each quarter throughout this year. . The Company also believes that this current economic environment will create an attractive market for future acquisitions which the Company is actively reviewing.
Sam Tawfik added. "At LMP, we intend to demonstrate rapid, efficient, and profitable expansion in a modern, online-centric economy. LMP is focused on acquiring dealer groups to create concentrated clusters of dealerships to derive maximum SG&A efficiency while expanding consumer product optionality. At the same time, we plan on maintaining each dealership's local brand recognition and online presence while simultaneously aggregating dealerships' new, used, subscription, and rental inventory on lmpmotors.com. Leveraging our access to potentially acquired dealership inventories should create one of the largest and most diverse online stores, providing consumers multiple options for access to vehicles. We plan to grow revenues and earnings of dealerships that we acquire by adding subscription and rental options for their customers. We believe this combined approach will produce continued revenue and earnings growth for our Company and our shareholders."
Non-GAAP Financial Measures
The Company has provided in this release certain non-GAAP financial measures, including EBITDA, Subscription Leasing and Rental Margins and Vehicle Sales Margins, to supplement its financial results that are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Management uses these financial metrics internally in analyzing the Company's financial results to assess operational performance and to determine the Company's future capital requirements. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP. The Company believes that both management and investors benefit from referring to these financial metrics in assessing our performance and when planning, forecasting and analyzing future periods. The Company believes these financial metrics are useful to investors and others to understand and evaluate the Company's operating results and it allows for a more meaningful comparison between the Company's performance and that of competitors. Our use of EBITDA, Subscription Leasing and Rental Margins and Vehicle Sales Margins have limitations as analytical tools, and you should not consider these performance measures in isolation from or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider these financial metrics along with other financial performance measures, including total revenues, total gross profit and net loss presented in accordance with GAAP.
Adjusted EBITDA
The Company defines Adjusted EBITDA as net loss before interest expense, income tax expense, depreciation (including vehicle inventory impairment) and amortization, as well as one-time costs such as acquisition and financing related costs.
The following table provides a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, on a historical basis and for each of the periods indicated.
Reconciliation of Net loss to Adjusted EBITDA
Q1 2020
Q4 2019
Change
Net loss
$
(1,720,188
)
$
(572,195
)
Interest expense
$
42,791
$
23,233
Tax
$
-
$
-
Depreciation and amortization expense - Property, equipment, leasehold improvements, and intangibles
$
78,434
$
26,505
Depreciation expense - fleet vehicles
$
228,763
$
249,031
Inventory impairment
$
91,742
$
49,180
Acquisition and financing related costs
$
507,469
$
-
Adjusted EBITDA
$
(770,989
)
$
(224,246
)
$(546,743)
Subscription Leasing and Rental Margins
The Company calculates Subscription Leasing and Rental Margins by deducting subscription and rental cost of revenues from subscription fee and rental revenues adjusted for non-recurring, material adjustments.
The following table provides a reconciliation of Subscription Leasing and Rental Margins to subscription fee and rental revenues, the most directly comparable GAAP financial measure, on a historical basis and for each of the periods indicated.
Reconciliation of Subscription Fees and Rental Revenues to Subscription Leasing and Rental Margin
Q1 2020
Q4 2019
Change from Q1 2020
Q1 2019
Change from Q1 2020
Total subscription fees and rental revenues
$
590,463
$
482,059
$
464,854
Subscription and rental cost of revenues
$
(47,704
)
$
(42,495
)
$
(188,587
)
Gross profit (loss)
$
542,759
$
439,564
$
276,268
Subscription Leasing and Rental Margin
91.9
%
91.2
%
0.7
%
59.4
%
32.5
%
Vehicle Sales Margins
The Company calculates Vehicle Sales Margins by deducting vehicle sales cost of revenues and from vehicle sales revenue.
The following table provides a reconciliation of Vehicle Sales Margins to Vehicle Sales Revenue, the most directly comparable GAAP financial measure, on a historical basis and for each of the periods indicated.
Reconciliation of Vehicle Sales Revenue to Vehicle Sales Margin
Q1 2020
Q4 2019
Change from Q1 2020
Q1 2019
Change from Q1 2020
Vehicle sales revenue
$
4,724,842
$
2,544,904
$
4,472,892
Vehicle sales cost of revenues
$
(4,481,581
)
$
(2,443,900
)
$
(4,478,192
)
Gross profit (loss)
$
243,261
$
101,004
$
(5,300
)
Vehicle sales margin
5.1
%
4.0
%
1.1
%
(0.1
%)
5.2
%
Conference Call
Management will host an investor conference call at 5:30 p.m. ET on Thursday, May 14, 2020 to discuss the Company's First Quarter 2020 Financial Results and conclude with Q&A from participants. All interested parties can join the call by dialing (855) 327-6837 or (631) 891-4304. A webcast of the call may be accessed at: http://public.viavid.com/index.php?id=139816
An archived webcast of the conference call will be accessible from the Investor Relations section of the company's website, https://investors.lmpah.com/.
A telephonic replay of the conference call will be available through Thursday, May 28, 2020 by dialing (844) 512-2921 or (412) 317-6671 and entering passcode 10009603#.
About LMP Automotive Holdings, Inc. - "Buy, Rent or Subscribe, Sell and Repeat."
LMP Automotive Holdings, Inc. (LMPX) describes its business model as "Buy, Rent or Subscribe, Sell and Repeat." This means that we "Buy" pre-owned automobiles primarily through auctions or directly from other automobile dealers, and new automobiles from manufacturers and manufacturer distributors at fleet rates. We "Rent or Subscribe" by either renting automobiles to our customers or allowing them to enter into our subscription plan for automobiles in which customers have use of an automobile for a minimum of thirty (30) days. LMP's all-inclusive vehicle subscription membership includes monthly swaps and covers insurance, maintenance and upkeep. It offers the flexibility to upgrade your vehicle to a more premium model or downgrade for a lesser cost model when you like. We "Sell" our inventory, including automobiles previously included in our rental and subscription programs, to customers as well, and then we "Repeat" the whole process.
Media Contact:
John Mattio President and Founder Lamnia International (203) 885-1058 jmattio@lamniacom.com
This press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Such statements include, but are not limited to, any statements relating to our expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "intend," "likely," "outlook," "plan," "potential," "project," "projection," "seek," "can," "could," "may," "should," "would," will," the negatives thereof and other words and terms of similar meanings. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition and stock value. Factors that could cause actual results to differ materially from those currently anticipated include: our dependence upon external sources for the financing of our operations; our ability to effectively executive our business plan; our ability to maintain and grow our reputation and to achieve and maintain the market acceptance of our services and platform; our ability to manage the growth of our operations over time; our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of others; our ability to maintain relationships with existing customers and automobile suppliers, and develop relationships; and our ability to compete and succeed in a highly competitive and evolving industry; as well as other risks described in our SEC filings. There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions or circumstances on which any such statement is based, except as required by law.
