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.