- Nine Month Cash Flow from Operations Increased to $7.4M vs
$(0.6M) for Same Period Prior Year
- Q2 Revenue Up 10.1% Year-Over-Year to $13.4M
- Written Orders Up 143% Year-Over-Year to $36.9M
- Company to host conference call at 4:15 p.m. ET
today
1847 Goedeker Inc. (NYSE American: GOED) (“Goedeker’s” or the
“Company”), a one-stop e-commerce destination for appliances,
furniture, home goods, and related products, today reported
financial results for its third quarter ended September 30,
2020.
Business Highlights:
- Site sessions increased 80% to 2.7 million in the third quarter
of 2020, up from 1.5 million in the prior year period.
- Written orders in the quarter ended September 30, 2020, reached
$36.9 million, up 143% from $15.2 million in the prior year
period.
- Shipped orders increased to $13.4 million in the third quarter
of 2020, up 10.1% from $12.2 million in the prior year period.
- Completed IPO on NYSE American on August 4, 2020; raised net
proceeds of approximately $9 million.
- Art Smuck, former CEO of FedEx Supply Chain, joined Goedeker’s
as Senior Strategic Advisor for Logistics to support accelerated
growth plans.
- Reduced annual debt service by $410,000 through 3.25% loan
refinancing.
- Expanded customer financing options with multiple new
third-party offerings with no credit risk or balance sheet impact
to the Company.
- Appointed new VP of Logistics, Jacob Guilhas, to accelerate
preparations for record revenue growth.
- Signed purchase agreement to acquire Appliances Connection,
ranked #1 in online appliance retail by USA Today, creating one of
the largest independent online retailers of household appliances in
the U.S.; upon closing, the Company’s revenue is expected to reach
$400M on an annualized basis in 2021, with approximately $30M in
EBITDA.
“I am excited report another strong quarter of revenue growth as
well as continued sharp improvement in our cash flow from
operations,” stated Doug Moore, CEO of 1847 Goedeker. “The
increased marketing spend led to record orders and cash on the
balance sheet which will convert to revenues as supply of
appliances returns closer to normal levels. Customers continue to
find our online offering compelling and we will continue to invest
in the sea change shift to online appliance buying.”
Moore continued, “We are pleased with the growth in site
sessions and orders and with cash flow from operations. The lack of
available product meant that we were able to ship only 37% of our
orders in the 2020 quarter, compared to more than three years of
shipped trends over 80%. The significant increase in orders
required us to use temporary staff to supplement our permanent
staff in order processing, customer service, and accounting. Had we
not experienced supply chain disruptions from COVID-19, we believe
that Goedeker’s would have realized $2.5 million to $2.7 million in
additional net margin contribution and we believe that expenses
would have been reduced by $500k to $750k due to reduction in
variable expenses related to lack of supply. A near term look
beyond supply constraints point towards mid-term
profitability.”
Third Quarter 2020 Financial Highlights:
- Cash flow from operations improved to $7.4 million in the nine
months ended September 30, 2020, up from ($0.7 million) in the
prior year period, an $8.1 million improvement.
- As of September 30, 2020, the Company had $12.4 million of cash
and cash equivalents, including unrestricted of $3.5 million and
restricted of $8.9 million.
- Net revenue increased 10.1% to $13.4 million in the quarter
ended September 30, 2020, up from $12.2 million in the prior year
period. Growth was primarily driven by higher demand resulting from
increased advertising spend.
- Gross profit was $2.2 million, or 16.2% of total net revenue,
up 7.5% from the prior year period. Increased gross profit was in
line with increased net revenue.
- Advertising expenses were $1.4 million for the quarter ended
September 30, 2020, up from $0.7 million in the prior year period.
The increase relates to an increase in advertising spending to
drive traffic to our website.
- Loss from operations in the third quarter of 2020 was $3.1
million. The loss primarily resulted from expenses we incurred in
advertising, bank fees, and personnel related to processing the
increase in orders that we could not ship at our normal level of
shipping because of supply chain issues from our manufacturers. We
believe that manufacturers will resolve the supply issues and we
will be able to ship product at historical rates. Had we shipped at
our normal shipping rates with the same gross margins, our gross
profit would have been approximately $4.8 million and our operating
income would have been $0.2 million.
- Driven primarily by non-cash items totaling approximately $4.7
million, net loss before income taxes for the nine-month period
ended September 30, 2020, was $10.9 million, as compared to a net
loss before income taxes of $2.1 million for the nine months ended
September 30, 2019. Excluding non-cash charges, pre-tax net loss
for the nine months ended September 30, 2020, would have been $7.6
million.
“We are addressing a $20 billion industry as the only pure play
appliance online retailer listed on a major exchange, and we are
still at an early stage of capitalizing on this tremendous
opportunity,” continued Moore. “Over the past year, we have been
investing in people, processes and systems, while developing a
world-class advertising and marketing platform in order to continue
to drive significant revenue growth and dramatically increase our
market share as we continue to execute on our vision of growing
Goedeker’s to a billion-dollar revenue company, and in the process,
becoming the largest, most profitable online retailer of appliances
in the U.S.”
Webcast and Conference Call
The Company will host a conference call and webcast to discuss
its third quarter 2020 financial results today at 4:15 p.m. ET.
Shareholders and other interested parties may participate in the
conference call by dialing 1-833-529-0213 (U.S. Toll-Free) or
1-236-389-2113 (International) a few minutes before the 4:15
p.m. ET start time. An audio-only webcast is also available by
visiting:
https://event.on24.com/wcc/r/2634270/06CA6B7A886A4F5763D47A67CBEAF2D8
For interested individuals unable to join the conference call, a
dial-in replay of the call will be available until November 30,
2020, and can be accessed by dialing +1-844-512-2921 (U.S. Toll
Free) or +1-412-317-6671 (International) and entering replay pin
number: 4585388. An archive of the webcast conference call will be
available shortly after the call ends at
investor.goedekers.com.
About 1847 Goedeker Inc.
The Company is an industry leading e-commerce destination for
appliances, furniture, and home goods. Since its founding in 1951,
the Company has transformed from a local brick and mortar operation
serving the St. Louis metro area to a respected nationwide
omnichannel retailer that offers one-stop shopping for national and
global brands. While the Company maintains its St. Louis showroom,
over 90% of sales are placed through its website (www.goedekers.com). The Company provides visitors
an easy to navigate the shopping experience and offers more than
185,000 items organized by category and product features.
Specialization in the home category has enabled the Company to
build a shopping experience and an advanced logistics
infrastructure that is tailored to the unique characteristics of
the market. Learn more at www.goedekers.com.
Forward Looking Statements
This press release contains “forward-looking statements” that
are subject to substantial risks and uncertainties. All statements,
other than statements of historical fact, contained in this press
release are forward-looking statements. Forward-looking statements
contained in this press release may be identified by the use of
words such as “anticipate,” “believe,” “contemplate,” “could,”
“estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,”
“potential,” “predict,” “project,” “target,” “aim,” “should,”
"will” “would,” or the negative of these words or other similar
expressions, although not all forward-looking statements contain
these words. Forward-looking statements are based on the Company’s
current expectations and are subject to inherent uncertainties,
risks and assumptions that are difficult to predict. Further,
certain forward-looking statements are based on assumptions as to
future events that may not prove to be accurate. These and other
risks and uncertainties are described more fully in the section
titled “Risk Factors” in the final prospectus related to the public
offering filed with the Securities and Exchange Commission and
other reports filed with the Securities and Exchange Commission
thereafter. Forward-looking statements contained in this
announcement are made as of this date, and the Company undertakes
no duty to update such information except as required under
applicable law.
Non-GAAP to GAAP Reconciliation
This press release contains a financial measure that is not
calculated in accordance with U.S. generally accepted accounting
principles (“GAAP”). The non-GAAP financial measure is net loss
before income taxes excluding certain non-cash charges (“Non-GAAP
Net Loss before Taxes”).
The non-GAAP financial information should be considered
supplemental to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. Management,
however, believes that this non-GAAP financial measure, when used
in conjunction with the results presented in accordance with GAAP,
may provide a more complete understanding of our results and may
facilitate a fuller analysis of our results, particularly in
evaluating performance from one period to another. Management has
chosen to provide this supplemental information to investors,
analysts, and other interested parties to enable them to perform
additional analyses of results and to illustrate the results giving
effect to the non-GAAP adjustments shown in the reconciliation
described in the next paragraph. Furthermore, the economic
substance behind our decision to use such non-GAAP measures is that
such measures approximate our controllable operating performance
more closely than the most directly comparable GAAP financial
measures. Management strongly encourages investors to review our
financial statements and publicly filed reports in their entirety
and cautions investors that the non-GAAP measures used by us may
differ from similar measures used by other companies, even when
similar terms are used to identify such measures.
As noted above, net loss before income taxes for the nine months
ended September 30, 2020, was $10.9 million. Non-GAAP Net Loss
before Taxes excludes (i) a loss on early extinguishment of debt of
$1,756,095, (ii) a write-off of acquisition receivable of $809,000,
and (iii) a non-cash charge related to the change in fair value of
a warrant liability of $2,127,656. Accordingly, to reconcile
Non-GAAP Net Loss before Taxes to the GAAP measure, net loss before
income taxes, we added back these non-cash charges of $4,692,751 to
equal GAAP net loss of $10,925,868.
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version on businesswire.com: https://www.businesswire.com/news/home/20201116005591/en/
Dave Gentry, CEO RedChip Companies Office: 1.800.RED.CHIP
(733.2447) Cell: 407.491.4498 dave@redchip.com
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