We define retail gross profit per unit as the aggregate retail and F&I gross profit in a given period divided by retail vehicles sold during that period. Maintained complete records of client tax returns and supporting . The differences related primarily to depreciable assets (use of different depreciation methods and lives for financial statement and income tax purposes), contract expenses and certain accrued expenses. CarLotz posted nearly $40 million in losses across 2021 compared to just $6.6 million loses in 2020. We offer our products and services to (i)corporate vehicle sourcing partners, (ii)retail sellers of used vehicles and (iii)retail customers seeking to buy used vehicles. RICHMOND, Va., March 15, 2021 (GLOBE NEWSWIRE) -- CarLotz, Inc. (NASDAQ: LOTZ)(CarLotz or the Company), a leading consignment-to-retail used vehicle marketplace, today announced financial results for the fourth quarter and full year ended December 31, 2020. CarLotz is a used vehicle consignment and Retail Remarketing business that provides our corporate vehicle sourcing partners and retail sellers of used vehicles with the ability to access the . (1)Gross profit per unit is calculated as gross profit for retail vehicles and finance and insurance, each of which is divided by the total number of retail vehicles sold in the period. CarLotz reached a deal in October to go public via a merger with Acamar Partners, a special purpose acquisition company (SPAC). Since we do not control these products before they are transferred to the consumer, we recognize commission revenue at the time of sale. Although we can provide no assurance that we will not see further negative impacts of the pandemic and related economic recession, we believe that these changing preferences will result in positive long-term trends for our business. Our gross profit per unit is therefore likely to fluctuate from period to period, perhaps significantly, due to mix of flat fee and alternative fee arrangements as well as due to the sales prices and fees we are able to collect on the vehicles we source under alternative fee arrangements. The conference call webcast will be available at investors.carlotz.com. All inventories, which are comprised of vehicles and parts held, for sale are reported at the lower of cost of net realizable value. Our technology offers a custom system for managing customer leads, scheduling appointments and test drives from our applications and websites as well as from third party providers. Last month, CarLotz cut back its revenue outlook for the year along with vehicles sold and gross profit estimates due to a pause on consignments from its largest commercial vehicle sourcing partner. If the vehicle is returned, the sale and associated revenue recognition is reversed, and the vehicle is treated as a purchase of inventory. Represents the principal amount outstanding as of December31, 2020. Investments in Additional Processing Capacity. We believe an expanded footprint will enable us to increase our vehicle sales and further penetrate our national vehicle sourcing partners while also attracting new corporate vehicle sourcing partners that were previously unavailable due to our geographic limitations. In connection with the audits of our consolidated financial statements as of December31, 2019 and 2018 and for theyears in the three year period ended December31, 2019, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting, which remained unremediated as of December 31, 2020. Vehicle reconditioning costs include parts, labor, inbound transportation costs and other costs such as mechanical inspection, vehicle preparation supplies and repair costs. Check out this fabulous retail store and online Interested parties may listen to the conference call via telephone by dialing 1-833-962-1461, or for international callers, 1-929-517-0392. We also sell vehicles to wholesalers or other dealers, primarily at auctions, generally for vehicles acquired via trade-in or vehicles acquired via consignment that do not meet our quality standards for sale to retail customers or that remain unsold at the end of the consignment period. Advertising costs are expensed as incurred. Our retail vehicle unit sale growth was primarily driven by the maturation of existing hubs, full-year effect of those hubs opened during 2018, and an increase inpercentage of units sourced via consignment. These measures may not be comparable to similarly titled measures reported by other companies. Our revenue for the years ended December 31, 2020, 2019 and 2018. Recalls and the increased regulatory scrutiny surrounding selling used vehicles with open safety recalls could adversely affect used vehicle sales or valuations, could cause us to temporarily remove vehicles from inventory, could force us to incur increased costs and could expose us to litigation and adverse publicity . As of December31, 2020, our contractual obligations were as follows: On March27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which includes a provision for the Paycheck Protection Program, or PPP, loans administered by the U.S. Small Business Administration. The increase was primarily due to increased penetration of our F&I product offerings. Selling, general and administrative (SG&A) expenses primarily include compensation and benefits, advertising, facilities cost, technology expenses, logistics and other administrative expenses. | Source: On December 2, 2020, CarLotz issued a promissory note (the Note) to AFC. CarLotz Inc. CarLotz, Inc. operates as a used vehicle consignment and retail remarketing business. Critical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or otherwise complex. For our corporate vehicle sourcing partners, we have developed proprietary technology that integrates with their internal systems and supports every step in the consignment, reconditioning and sales process. We actively monitor attractive markets to enter, with a focus on highly concentrated or growing demographic areas and attractive start-up costs. Our reconditioning program is driven byyears of experience that allows us to cost-effectively repair, enhance and process a large number of vehicles. As retail remarketing continues to develop as a more established alternative and as CarLotz expands to service buyers and sellers nationwide, we anticipate substantial growth with our existing commercial sellers. Here's why. Used vehicle prices also exhibit seasonality, with used vehicle prices depreciating at a faster rate in the last two quarters of each year and a slower rate in the first two quarters of each year. We offer 30 days, no-reason return policy. We believe our marketplace model drives higher returns relative to our competition. Wholesale vehicle sales revenue increased by $5.3million, or 168.1%, to $8.5million during 2019, from $3.2million in 2018. The purpose of a return policy is to outline the specific requirements as to how, when, and under what circumstances shoppers can return their purchased items. We recognize revenue based on the total purchase price stated in the contract, including any processing fees. Selling, General and Administrative Expenses. Using this technology, we are able to lower the days-to-sale while assisting sellers to receive higher vehicle values and track every step of the sales process. The revenue recognized by CarLotz includes the agreed upon transaction price, including any service fees. Specialties: Thanks so much for shopping at CarLotz, the consignment store for cars! 2019 Versus 2018. Before shipping a return, photograph the item for your records. CarLotz enables sellers to achieve greater vehicle values without the traditional hassles of the sale-by-owner market, such as meeting with strangers, arranging for financing and warranties, and handling burdensome DMV paperwork. If you receive the product and are not satisfied, you can ask for a return with no reason for 30 days from the delivery date and get a full refund. Under the Ally Facility, the Company is subject to financial covenants that require the Company to maintain at least 10% of the credit line in cash and cash equivalents, to maintain at least 10% of the credit line on deposit with Ally Bank and to maintain a minimum tangible net worth of $90 million calculated in accordance with GAAP. We provide retail vehicle buyers with options for financing, insurance and extended warranties. 2020 Versus 2019. Cost of sales also includes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value. Our step-by-step process includes all aspects of preparing a vehicle for sale, including a 133-point inspection, mechanical and body reconditioning, paint, detail, merchandising and imaging. In April 2020, we received a loan totaling approximately $1.7 million from the Small Business Administration under the Paycheck Protection Program (PPP) to help us keep our workforce employed and avoid further headcount reduction during the COVID-19 crisis. At these hubs, our vehicles undergo an extensive 133-point inspection and reconditioning in preparation for resale. For the first quarter of 2021, the Company expects the following: For 2021, the Company expects the following: A conference call to discuss the fourth quarter and 2020 financial results is scheduled for today, March 15, 2021 at 4:30 pm ET. We provide customers with options for financing, insurance and extended warranties. 2019 Versus 2018. Tons of financial metrics for serious investors. When expanded it provides a list of search options that will switch the search inputs to match the current selection. These vehicles sold to wholesalers are primarily acquired from customers who trade-in their existing vehicles as part of a retail vehicle sale as described above or, from consignors, which do not meet our quality standards, or which remain unsold at the end of the consignment period. C.J. 2019 Versus 2018. We definepercentage of unit sales sourced via consignment as thepercentage derived by dividing the number of vehicles sold during the period that were sourced via consignment divided by the total number of vehicles sold during the period. Under these alternative fee arrangements, our gross profit for a particular unit could be higher or lower than the gross profit per unit we would realize under our flat fee pricing model depending on the units sale price and fees we are able to charge in connection with the sale. Income received for leases of owned vehicles under noncancelable operating leases is recorded in Lease income, net in the consolidated statements of operations. We define vehicles available-for-sale as the number of vehicles listed for sale on our website on the last day of a given reporting period. Advances under the Ally Facility, if not demanded earlier, are due and payable for each vehicle financed under the Ally Facility as and when such vehicle is sold, leased, consigned, gifted, exchanged, transferred, or otherwise disposed of. We also plan to implement certain accounting systems to automate manual processes. We define a monthly unique visitor as an individual who has visited our website within a calendar month, based on data provided by Google Analytics. We define a hub as a physical location at which we recondition and store vehicles purchased and sold within a market. CarLotz is not your traditional dealership. Cost of sales increased by $13.6million, or 14.5%, to $107.4million during 2020, from $93.8million in 2019. Amounts drawn on the Note were used for working capital purposes in the ordinary course of business. Growth in vehicles available-for-sale increases the selection of vehicles available to consumers in all of our markets simultaneously, which we believe will allow us to increase the number of vehicles we sell. The non-cash adjustments primarily related to other charges of $0.6million, partially offset by depreciation and amortization of $0.3million and share-based compensation expense of $0.2million. With experience from our initial locations, we have learned how to scale our hub and processing operations to drive efficiencies. As we scale our business, our plan is to invest in increased processing capacity. Our proprietary Retail Remarketing technology provides our corporate vehicle sourcing partners with real-time performance metrics and data analytics along with custom business intelligence reporting that enables price and vehicle triage optimization between the wholesale and retail channel. Percentage of unit sales sourced via consignment. Years Ended December31, 2020, 2019 and 2018. We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our progress and make strategic decisions. For the year ended December31, 2019, net cash used in operating activities was $5.5million, primarily driven by a net loss of $12.7million adjusted for non-cash charges of $2.3million and net changes in our operating assets and liabilities of $4.9million. The increase was due to the increase in compensation and benefits costs of $2.6million, marketing expenses of $1.9million and other costs of $2.1million. I have a well-rounded work history with strengths in auto appraising, car buying/selling, fundraising, event management, public speaking, teaching, process evaluation and design, analytics, issues identification and resolution, and strategic planning. CarLotz, Inc., One of the Largest Privately-Held Used Vehicle Retail Disruptors with the Industry's Only Consignment-to-Retail Sales Platform, to Become a Public Company Although the ultimate impacts of COVID-19 remain uncertain, recent surveys found that 55% of those surveyed are actively considering buying a car and 67% reported an increased reliance on personal vehicles, with 60% open to buying a car online as compared to 32% prior to the pandemic. The company, which is valued at $827 million, is now listed on the Nasdaq under the ticker symbol LOTZ. Depreciation on vehicles leased to customers is calculated using the straight-line over the estimated useful life. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. The Ally Facility is secured by a grant of a security interest in certain vehicle inventory and other assets of the Company. Lack of training. And, great representation from Executive Women All of these initiatives are designed to lower reconditioning costs per unit. This improvement was primarily driven by a decrease in negative gross profit per unit, which was partially offset by increased wholesale vehicle unit sales. The following table presents certain information from our consolidated statements of operations by channel for the years indicated: We present operating results down to gross profit for our three distinct revenue channels along with our net lease income: Retail Vehicle Sales: Retail vehicle sales represent sales of vehicles to our retail customers through our hubs in various cities. Such statements are based on managements current expectations and are not guarantees of future performance. Our hubs cover a geographic area of approximately 300 miles, while some of our commercial accounts expand our coverage up to 1,000 miles, based on available inventory type. CarLotz buyers save money - typically paying 10-20% below traditional dealership prices - while shopping a wide selection of used cars in . This increase was primarily driven by a shift in the sale of owned units to consigned units, which typically have higher margins, as well as increased sales of F&I product offerings. All returned items must be in new and unused condition with original tags and labels attached. We offer our corporate vehicle sourcing partners a pioneering, Retail Remarketing service that fully integrates with their existing technology platforms. Total selling, general and administrative expenses. We are excited to have executed a merger with Acamar Partners Acquisition Corp. in January that resulted in our debut as a public company, and we have established the foundation required to continue to build and grow through 2021 and beyond., Highlights of Fiscal Year 2020 Financial Results. We sell used vehicles to our retail customers through our hubs in various cities. This growth was driven by double-digit growth in retail units, retail average selling price, and financing and product revenues, Retail unit sales exceeded expectations and were 1,815 compared to 1,614 in the prior year period, an increase of 12%, Financing and F&I Product Sales increased 49% year over year for the quarter, Gross profit increased 25% to $2.5 million from $2.0 million in the prior year period, Retail gross profit per unit (Retail GPU) increased 25% to $1,546 from $1,241 in the prior year period, SG&A expenses increased 36% to $6.4 million from $4.7 million in the same period in 2019. 2020 Versus 2019. This growth was driven by double-digit growth in retail average selling price and financing and product revenues, Unit sales were 6,215 compared to 6,435 in the prior year (impacted by Covid-19), Financing and F&I Product Sales increased 25% compared to 2019, Gross profit increased 29% to $11.3 million from $8.7 million in 2019, Retail GPU increased 29% to $1,797 from $1,393 in the prior year, SG&A expenses decreased 4% to $17.6 million from $18.3 million in 2019. We receive a rate of interest higher from our customer than the rate we pay to the third party lessor. This is a key metric as each hub expands our service area, vehicle sourcing, reconditioning and storage capacity. And while the used-car seller offers a unique business model, there may be more. The full amount of the PPP loan was repaid in connection with the closing of the Merger. These provisions include exemption from the auditor attestation requirement under Section404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth companys internal control over financial reporting. EBITDA and Adjusted EBITDA have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of the results as reported under GAAP. Parking around the former Kitchen 64 diner was once again at a premium Monday morning, as the brothers behind Midlothian's Brick House Diner held a soft We have returned a number of vehicles from consignment during the first quarter of 2021 to date and expect to continue to return vehicles into the second quarter of 2021 as we work through the additional inventory that we sourced during the second half of 2020 to drive our growth.