Kaixin Auto Holdings Announces Unaudited First Half 2020 Financial Results
First Half of 2020 Operational Highlights
- Gross Merchandise Value (GMV)1 was
US$34.2 million , representing a decrease of 84.5% fromUS$220.8 million in the first half of 2019.
- Number of cars sold was 673 units, compared with 3,657 units sold in the first half of 2019.
- Inventory turnover days were 98 days, compared with 41 days in the first half of 2019.
First Half of 2020 Financial Highlights
- Total net revenues were
US$33.3 million , representing a decrease of 83.7% fromUS$204.6 million in the first half of 2019.
- Gross profit was
US$0.9 million , representing a decrease of 89.3% fromUS$8.6 million in the first half of 2019.
- Loss from operations was
US$5.3 million , compared with a loss ofUS$8.3 million in the first half of 2019.
- Net loss attributable to the Company was
US$5.8 million , compared with a net income attributable to the Company ofUS$57.3 million in the first half of 2019.
- Adjusted net loss2 (non-GAAP) was
US$4.6 million , compared with an adjusted net loss ofUS$1.7 million in the first half of 2019.
- Adjusted loss from operations2 (non-GAAP) was
US$4.0 million , compared with an adjusted loss from operations ofUS$1.6 million in the first half of 2019.
- Adjusted EBITDA3 (non-GAAP) was negative
US$3.9 million , compared with an adjusted EBITDA ofUS$2.0 thousand in the first half of 2019.
“We are one of the dealership networks in the premium used car segment in
“Facing the dramatic decline of sales and gross margin of the used-car dealerships amid the pandemic early this year, we took prompt cost-cutting initiatives to preserve resources and improve operating efficiency. The company has been laying off non-essential personnel and finding ways to reduce corporate overheads. The cost cutting effort results in significant improvement in operating efficiency. Going forward, we will continue to refine our business and operating model, and explore new partnerships and growth opportunities,” added Mr.
Ms.
First half 2020 Results
Total net revenues for the first half of 2020 were
The COVID-19 pandemic had a material adverse impact on the Company’s used-car dealership business.
Cost of revenues was
Gross profit was
Operating expenses were
Selling and marketing expenses were
Research and development expenses were
General and administrative expenses were
Loss from operations was
Net loss attributable to the Company was
Adjusted net loss (non-GAAP) was
Adjusted loss from operations (non-GAAP) was
Adjusted EBITDA (non-GAAP) was negative
Business Outlook
Given the serious challenges to its operations, the Company decided to put a halt to its used-car dealership business operations while reexamining its business model, as publicly announced on
- total revenues for the second half of 2020 to be of a minimal amount. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
About Non-GAAP Financial Measures
To supplement
These non-GAAP financial measures are not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliation of non-GAAP results of operations measures to the comparable GAAP financial measures" at the end of this release.
For more information, please contact:
Investor Relations
Email: ir@kaixin.com
_________________
1Includes automobile sales transactions at the Company’s dealerships including cars owned by
2Adjusted loss from operations and adjusted net loss are non-GAAP measures. We define adjusted loss from operations as loss from operations excluding share-based compensation expenses, provision for financing receivable, provision for PPE, one-time provision for other receivable and one-time listing fee. We define adjusted net loss as net (loss) income excluding fair value change of contingent consideration, share-based compensation expenses, provision for financing receivable, provision for PPE, one-time provision for other receivable, and one-time listing fee. See "About Non-GAAP Financial Measures" below.
3Adjusted EBITDA is a non-GAAP financial measure. It is defined as net (loss) income excluding fair value change of contingent consideration, share-based compensation expense, interest expenses, income tax expenses, depreciation, provision for financing receivable, provision for PPE, one-time provision for other receivable and one-time listing fee. See "About Non-GAAP Financial Measures" below.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(In thousands of US dollars) | |||||||
2019 | 2020 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 3,190 | $ | 1,040 | |||
Accounts receivable, net | 219 | 247 | |||||
Prepaid expenses and other current assets | 27,586 | 30,565 | |||||
Inventory | 20,990 | 17,536 | |||||
Total current assets | 51,985 | 49,388 | |||||
Non-current assets: | |||||||
Property and equipment, net | 153 | 110 | |||||
Right-of-use lease assets | 2,252 | 1,700 | |||||
Total non-current assets | 2,405 | 1,810 | |||||
TOTAL ASSETS | $ | 54,390 | $ | 51,198 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,122 | $ | 1,072 | |||
Short-term debt | 16,630 | 15,213 | |||||
Accrued expenses and other current liabilities | 17,302 | 17,525 | |||||
Short-term lease liabilities | 1,785 | 2,216 | |||||
Amounts due to related parties | 4,214 | 2,614 | |||||
Advance from customers | 1,677 | 4,946 | |||||
Income tax payable | 5,319 | 5,251 | |||||
Total current liabilities | 51,049 | 48,837 | |||||
Non-current liabilities: | |||||||
Long-term lease liabilities | 810 | 322 | |||||
Total non-current liabilities | 810 | 322 | |||||
TOTAL LIABILITIES | $ | 51,859 | $ | 49,159 | |||
Shareholders' Equity: | |||||||
Ordinary shares | 5 | 6 | |||||
Additional paid-in capital | 186,450 | 191,894 | |||||
Statutory reserves | 4,004 | 4,004 | |||||
Accumulated deficit | (192,189 | ) | (197,967 | ) | |||
Accumulated other comprehensive income (loss) | (2,840 | ) | (2,884 | ) | |||
|
(4,570 | ) | (4,947 | ) | |||
Non-controlling interest | 7,101 | 6,986 | |||||
TOTAL EQUITY | 2,531 | 2,039 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 54,390 | $ | 51,198 | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
(In thousands of US dollars, except share and per share data) | |||||||
For the Six Months Ended | |||||||
2019 | 2020 | ||||||
Net revenues | |||||||
Automobile sales | $ | 200,914 | $ | 32,996 | |||
Others | 3,685 | 299 | |||||
Total net revenues | 204,599 | 33,295 | |||||
Cost of revenues | |||||||
Automobile sales | (193,304 | ) | (32,374 | ) | |||
Provision for financing receivable | (2,594 | ) | - | ||||
Others | (71 | ) | (1 | ) | |||
Total cost of revenues | (195,969 | ) | (32,375 | ) | |||
Gross profit | 8,630 | 920 | |||||
- | - | ||||||
Operating expenses: | |||||||
Selling and marketing | (8,040 | ) | (1,852 | ) | |||
Research and development | (1,916 | ) | (503 | ) | |||
General and administrative | (6,963 | ) | (3,837 | ) | |||
- | - | ||||||
Total operating expenses | (16,919 | ) | (6,192 | ) | |||
- | - | ||||||
Loss from operations | (8,289 | ) | (5,272 | ) | |||
Other income, net | 1,506 | 84 | |||||
Fair value change of contingent consideration | 65,594 | - | |||||
Interest income | 59 | 5 | |||||
Interest expenses | (1,034 | ) | (607 | ) | |||
Total non-operating income (loss) | 66,125 | (518 | ) | ||||
Income (loss) before provision of income tax and noncontrolling interest, net of tax | 57,836 | (5,790 | ) | ||||
Income tax expenses | (628 | ) | - | ||||
- | - | ||||||
Net income (loss) | 57,208 | (5,790 | ) | ||||
Net loss attributable to non-controlling interests | 101 | 12 | |||||
Net income (loss) attributable to |
$ | 57,309 | $ | (5,778 | ) | ||
Net income (loss) per share attributable to |
|||||||
Basic | $ | 1.94 | $ | (0.10 | ) | ||
Diluted | $ | 1.09 | $ | (0.10 | ) | ||
Weighted average number of shares used in calculating net (loss) income per ordinary share attributable to |
|||||||
Basic | 29,609,923 | 59,649,464 | |||||
Diluted | 52,809,497 | 59,649,464 | |||||
Reconciliation of Non-GAAP results of operations measures to the comparable GAAP financial measures | |||||||
(In thousands of US dollars) | |||||||
For the Six Months Ended | |||||||
2019 | 2020 | ||||||
Loss from operations | $ | (8,289 | ) | $ | (5,272 | ) | |
Add back: Shared-based compensation expenses | 2,510 | 1,232 | |||||
Add back: Provision for financing receivable | 2,594 | - | |||||
Add back: Provision for PPE | 507 | - | |||||
Add back: One-time provision for other receivable | 150 | - | |||||
Add back: One-time listing fee | 905 | - | |||||
Adjusted loss from operations | $ | (1,623 | ) | $ | (4,040 | ) | |
Net income (loss) | $ | 57,208 | $ | (5,790 | ) | ||
Add back: Fair value change of contingent consideration | (65,594 | ) | - | ||||
Add back: Shared-based compensation expenses | 2,510 | 1,232 | |||||
Add back: Provision for financing receivable | 2,594 | - | |||||
Add back: Provision for PPE | 507 | - | |||||
Add back: One-time provision for other receivable | 150 | - | |||||
Add back: One-time listing fee | 905 | - | |||||
Adjusted net loss | $ | (1,720 | ) | $ | (4,558 | ) | |
Net income (loss) | $ | 57,208 | $ | (5,790 | ) | ||
Add back: Fair value change of contingent consideration | (65,594 | ) | - | ||||
Add back: Shared-based compensation expenses | 2,510 | 1,232 | |||||
Add back: Provision for financing receivable | 2,594 | - | |||||
Add back: Provision for PPE | 507 | - | |||||
Add back: One-time provision for other receivable | 150 | - | |||||
Add back: One-time listing fee | 905 | - | |||||
Add back: Interest expenses | 975 | 602 | |||||
Add back: Income tax expenses | 628 | - | |||||
Add back: Depreciation | 119 | 41 | |||||
Adjusted EBITDA | $ | 2 | $ | (3,915 | ) |
Kaixin Auto Holdings