EINC E Automotive Inc

TORONTO, Aug. 9, 2022 /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 months ("Q2 2022") and six months ("YTD 2022") ended June 30, 2022. Financial references herein are in U.S. dollars unless otherwise indicated.

"We continued to attract new marketplace participants, more vehicle listings and higher transaction values on our digital wholesale marketplace, EBlock," said Jason McClenahan, President & CEO, E INC. "As an exchange, our EBlock platform benefits more from higher transaction volumes than higher vehicle prices. The wholesale market is facing ongoing macro challenges. Inventory remains extremely tight and pricing continues to be high which is impacting demand. This dynamic amplifies the need for auto dealers to seek an easy-to-use digital platform that enables them to profitably and effectively manage that inventory. However, we are not immune to these macro factors. When the market normalizes, we believe we will be well positioned to earn more units per customer. In the meantime, we have adjusted our strategy to focus our growth in our four existing markets, Canada, the U.S. West, Midwest and Gulf States markets, rather than expanding across the entire U.S. market by the end of 2023. Our 'digital-platform meets physical-location' strategy is designed to enable profitability sooner and an efficient use of our growth capital by expanding the digital radius beyond the limited physical auction radius. This strategy puts us in a strong position to capitalize on the changes underway in the market as dealers search for ways to improve efficiency, transact more frequently and compete with direct to consumer models." 

2022 Q2 Highlights 
(Comparison periods in each case are the three months ended June 30, 2021)

• Revenue was up 45%, to $30.1 million from $20.7 million in the prior period, primarily driven by growth in Vehicles Transacted across its EBlock digital marketplace, as well as, the growth in its EDealer subscriber base. Acquisitions contributed approximately 35% revenue growth and organic growth contributed approximately 10% revenue growth.
• Gross transaction value was up 52% to $849.4 million in Q2 2022, driven by the volume and dollar value of vehicles transacted.
• Vehicles transacted were up 27% to 52,719 in Q2 2022, primarily as a result of the Company's 'digital-platform meets physical-location' strategy with the Quebec acquisitions, FastLane Auto Exchange and a partial period from Louisiana's 1st Choice Auto Auction.
• Marketplace participants grew 44% to 12,101, as of June 30, 2022, compared to the same point in 2021, listing a record number of vehicles for sale in the quarter on EBlock.
• Net loss was $12.7 million compared to a loss of $3.8 million in the corresponding period in 2021.
• Adjusted EBITDA¹ loss was $10.7 million in Q2 2022 compared to a loss of $47 thousand in Q2 2021, primarily due to the U.S. expansion strategy which began in Q3 2021.
• The Company acquired Louisiana's 1st Choice Auto Auction, a 34-acre top-tier independent auction marketplace located in Hammond, Louisiana, that has historically transacted approximately 15,000 vehicles annually. This acquisition supports the launch of the EBlock digital platform in the Gulf States.

E INC's unaudited financial statements for the three months and six months ended June 30, 2022 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 Tuesday, August 9, 2022 at 5:00 PM 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) 484-0475 or (888) 221-3881 with the conference identification of 2431135. 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 investors.e.inc or https://app.webinar.net/GEY2q42po6n. 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 financial 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 financial 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 financial 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 financial measures and industry metrics in the evaluation of issuers. Management also uses non-IFRS financial 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 (recovery), net, depreciation and amortization, share-based compensation expense, acquisition-related expenses, restructuring costs, and other expense (income), net.

The following table reconciles net loss to Adjusted EBITDA loss for the three months and six months ended June 30, 2022 and June 30, 2021: 

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 growth and replicating success in the U.S. market.

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 normalize. 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 Annual Information Form dated March 22, 2022.  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. All of the forward-looking information in this press release is expressly qualified by the foregoing cautionary statements. Additional information relating to E INC, including our Annual Information Form, can be found on SEDAR at www.sedar.com

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

Unaudited Interim Condensed Consolidated Statements of Financial Position 
[Expressed in thousands of US dollars]

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

SOURCE E Automotive Inc.