TORONTO, Nov. 12, 2021 /CNW/ - E Automotive Inc. d/b/a E Inc. (TSX: EINC) (the "Company" or "E INC") a company that connects the automotive wholesale and retail experiences with a proprietary technology platform operating under the brands EBlock and EDealer, today announced its financial and operational results for the three and nine months ended September 30, 2021 ("Q3 2021"). Financial references herein are in US dollars unless otherwise indicated.

"Effective inventory management is a critical element of auto dealership profitability. Our platform, which offers an online wholesale auction marketplace where dealerships can purchase or sell vehicles, as well as access innovative software solutions, empowers dealerships to operate more efficiently," said Jason McClenahan, President & CEO, E INC. "We have established great momentum and built a business of scale in this rapidly evolving and growing market. We continue to grow in Canada with the recent acquisitions of TradeHelper and ESP Auctions which extend our market penetration further into Quebec. Our market leadership in Canada, established scale in the western U.S., as well as the capital from the IPO put us in a great position to aggressively expand across the United States and fuel continued organic growth as dealerships increasingly adopt technology to drive performance."

Q3 2021 Highlights
(Comparison periods in each case are the three months ended September 30, 2020)

  • Revenue of $19.8 million, up 108% compared to $9.5 million, primarily as a result of approximately 55% organic growth and the three acquisitions completed since the comparable period last year
  • Gross transaction value of $538.4 million, up 129%, which is a function of the volume and dollar value of vehicles transacted
  • Vehicles transacted of 41,970, up 84%
  • Net loss of $6.3 million, compared to $0.4 million
  • Adjusted EBITDA1 loss of $1.8 million, compared to Adjusted EBITDA of $0.5 million
  • In August 2021, the Company acquired Les Enchères D'Automobiles St- Pierre, Ltée d/b/a ESP and Gestion Malyka, Inc d/b/a TradeHelper, which further strengthened its position in Quebec.
  • The Company raised net proceeds of approximately C$127.7 million from its initial public offering subsequent to the end of the quarter and its common shares began trading on the TSX under the symbol "EINC" on November 3, 2021.

E INC's unaudited financial statements for the three and nine months ended September 30, 2021 and Management's Discussion & Analysis for the same period have been filed on SEDAR at www.sedar.com.

Notice of Conference Call
E INC. will host a conference call Friday, November 12, 2021 at 8:30 AM ET to discuss its financial results. Jason McClenahan, President & CEO, and Andy Bohlin, CFO, will co-chair the call. All interested parties can join the call by dialing (647) 792-1240 or (800) 430-8332 with the conference identification of 9020280. Please dial in 15 minutes prior to the call to secure a line. A live audio webcast of the conference call will also be available at e.inc/investors. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.

About E INC.
E INC's mission is to optimize the online vehicle buying, selling, and management experience for automotive dealers and consumers. E INC has a digital platform (the "Platform") that provides automotive dealerships with access to an online wholesale auction marketplace where they can purchase or sell vehicles to other dealers, as well as access innovative software solutions to support dealers' digital retailing and inventory management. Access to E INC's Platform is complemented by ancillary service offerings to assist dealers with supplementary auction-related needs, along with driving consumer traffic to their digital properties and optimizing other business processes. E INC's digital wholesale marketplace goes to market under the brand EBlock, and E INC's digital suite of retail products goes to market under the brand EDealer.

Non-IFRS Financial Measures
This press release makes reference to certain non-IFRS measures and industry metrics. These measures are not recognized measures under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures, including "Adjusted EBITDA". This press release also makes reference to "vehicles transacted", "marketplace participants", "subscribers", "gross transaction value", each of which are operating metrics used in our industry. Non-IFRS measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures and industry metrics in the evaluation of issuers. Management also uses non-IFRS measures and industry metrics in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and forecasts and determine components of management compensation.

Non-IFRS Measures
"Adjusted EBITDA" means net loss for the period, adjusted to exclude: finance expense, net, income tax expense, depreciation and amortization, share-based compensation expense, transaction costs, which are costs associated with this Offering that are not directly attributable to the issuance of new shares, acquisition-related expenses, expenses related to non-routine legal matters, and other expense (income), net.

The following table reconciles net loss to Adjusted EBITDA loss for the three and nine months ended September 30, 2021 and September 30, 2020:


The three months ended


The nine months ended


September
30,

2021


September 3
0,

2020


September
30,

2021


September
30,

2020


$


$


$


$









Net loss for the period

(6,349,141)


(433,756)


(13,149,208)


(3,433,303)

Finance expense, net

1,124,538


74,366


2,536,800


199,620

Income tax expense

21,696



21,696


Depreciation and amortization

1,319,623


310,977


3,647,773


833,227

Share-based compensation expense

1,475,670


341,402


3,220,738


790,892

Transaction costs (1)

622,396



961,318


Acquisition costs

127,615



229,687


Non-routine legal expense (2)



52,932


Other expense (income), net (3)

(136,702)


182,579


79,630


(428,986)

Total Adjusted EBITDA

(1,794,305)


475,568


(2,398,634)


(2,038,550)









(1) Transaction costs represent one time costs associated with the Company's IPO that are not directly attributed to the issuance of new shares.  These expenses are recorded within Selling, general and administrative expenses.

(2) Non-routine legal expense is related to a one time settlement.  This expense is recorded within Selling, general and administrative expenses.

(3) Other expense, income (net) includes: foreign exchange loss (gain), mark to market impacts of our current and non-current liabilities carried at fair value through profit and loss, impairment on note receivable, gain on forgiveness of the E INC 2020 PPP Loan (as defined herein) and loss on early extinguishment of borrowings.

Forward Looking Statements
This press release may contain forward-looking information and statements within the meaning of applicable securities legislation, which reflect management's current expectations regarding future events. These statements are based on the Company's expectations, estimates, forecasts, and projections and include, without limitation, statements regarding the future success of the Company's business.

The forward-looking statements in this press release are based on certain assumptions, including that the Company's business will continue to perform in accordance with recent history and that industry fundamentals remain strong. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including the risks discussed under the heading "Risk Factors" in the Company's Supplemented Base Prep Prospectus dated November 2, 2021.  Actual results could differ materially from those projected herein. Readers, therefore, should not place undue reliance on any such forward-looking statements. The forward-looking statements included herein are made as of the date of this press release and the Company does not undertake any obligation to update such forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

Unaudited Interim Condensed Consolidated Statements of Financial Position
[Expressed in United States dollars]


As at

September 30,
2021


December 31,
2020


$


$

ASSETS




Current assets




Cash and cash equivalents

29,257,422


37,038,524

Trade and other receivables

85,062,611


9,608,182

Prepaid expense

1,874,306


621,573

Net investment in lease

288,732


8,371

Total current assets

116,483,071


47,276,650

Non-current assets




Right-of-use assets

11,611,427


3,024,931

Property and equipment, net

2,022,028


1,330,339

Intangible assets, net

5,652,176


-

 Goodwill

39,146,640


-

TOTAL ASSETS

174,915,342


51,631,920





LIABILITIES




Current liabilities




Trade and other payables

93,757,601


11,277,680

Deferred revenue

674,971


243,172

Lease obligations

4,115,065


810,175

Borrowings

15,004,971


278,896

Other current liabilities

3,671,445


-

Total current liabilities

117,224,053


12,609,923

Non-current liabilities




Lease obligations

8,504,226


2,720,066

Borrowings

-


61,766

Other non-current liabilities

5,777,655


-

TOTAL LIABILITIES

131,505,934


15,391,755





SHAREHOLDERS' EQUITY




Share capital

103,781,635


60,143,936

Warrants

6,005,606


1,162,572

Contributed surplus

(27,807,214)


57,510

Foreign currency translation reserve

227,811


525,369

Accumulated deficit

(38,798,430)


(25,649,222)

TOTAL SHAREHOLDERS' EQUITY

43,409,408


36,240,165





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

174,915,342


51,631,920

 

Unaudited Interim Condensed Consolidated Statements of Loss and Other Comprehensive Loss
[Expressed in US dollars, except per number of shares]



For the three months ended
September 30,


For the nine months ended
September 30,


2021


2020


2021


2020


$


$


$


$









Revenue

19,800,082


9,522,004


56,962,049


21,047,515

Cost of revenue

10,859,136


4,791,222


29,578,914


11,426,777

Gross profit

8,940,946


4,730,782


27,383,135


9,620,738









Operating expenses








Product, technology and development

809,002


622,295


3,805,976


1,749,976

Selling, general and administrative

12,151,930


3,974,321


30,440,468


10,700,204

Depreciation and amortization

1,319,623


310,977


3,647,773


833,227

Operating loss

(5,339,609)


(176,811)


(10,511,082)


(3,662,669)









Other expense (income), net

(136,702)


182,579


79,630


(428,986)

Finance expense, net

1,124,538


74,366


2,536,800


199,620









Loss before income taxes

(6,327,445)


(433,756)


(13,127,512)


(3,433,303)









Income tax expense

21,696


-


21,696


-









Net loss for the year

(6,349,141)


(433,756)


(13,149,208)


(3,433,303)









Other comprehensive gain (loss) that may be

reclassified to profit or loss in subsequent years








Exchange differences on translation of

foreign operations and reporting currency

(915,658)


293,179


(297,558)


(410,458)

Total comprehensive loss

(7,264,799)


(140,577)


(13,446,766)


(3,843,761)

















Loss per common share - basic and diluted

$                (0.61)


$                 (0.03)


$                (1.21)


$                 (0.22)

Weighted average number of

common shares outstanding - basic and diluted

10,400,100


15,394,850


10,909,710


15,386,540

 

Unaudited Interim Condensed Consolidated Statements of Cash Flows
[Expressed in US Dollars]


For the nine months ended September 30,

2021


2020


$


$

Operating activities




Net loss for the period

(13,149,208)


(3,433,303)

Adjustment to reconcile net loss to net cash used in operating activities




Depreciation and amortization

3,647,773


833,227

Share-based compensation

3,220,738


790,892

Non-cash other expense

(154,767)


-

Non-cash finance expense

2,464,427


209,614

Changes in non-cash working capital items:




Trade and other receivables

(61,753,292)


(18,903,120)

Prepaid expense

(714,858)


386,440

Trade and other payables

64,079,167


23,378,786

Deferred revenue

280,565


327,900

Cash flows (used in)/ provided by operating activities

(2,079,455)


3,590,436





Investing activities




Receipts from net investment in lease

14,797


70,829

Purchases of property and equipment

(559,476)


(1,116,893)

Acquisitions of business, net of cash acquired

(29,266,253)


-

Cash flows used in investing activities

(29,810,932)


(1,046,064)





Financing activities




Proceeds from borrowings

-


353,400

Proceeds from issuance of common shares

109,892


1

Proceeds from issuance of preferred shares

45,538,615


250,621

Proceeds from exercise of warrants

1,700,000


-

Common share repurchase

(20,296,555)


(261,221)

Repayment of lease obligations

(2,920,915)


(773,868)

Repayment of other current and non-current liability

(304,120)


-

Cash flows used in financing activities

23,826,917


(431,067)





Net change in cash and cash equivalents during the period

(8,063,470)


2,113,305

Effect of foreign exchange on cash and cash equivalents

282,368


(281,453)

Cash and cash equivalents, beginning of the period

37,038,524


12,862,435

Cash and cash equivalents, end of the period

29,257,422


14,694,287

 

SOURCE E Inc.

Copyright 2021 Canada NewsWire

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