Q1 2024 Gross Margin Expands Significantly to 30.1%, Drives Adjusted EBITDA of $0.4 Million
Company’s Reaffirms Full Year 2024 Revenue Guidance of $33.0 Million
KISSIMMEE, Fla., June 28, 2024 (GLOBE NEWSWIRE) -- ECD Auto Design (Nasdaq: ECDA) (“ECD” or the “Company”), the world’s largest Land Rover and Jaguar restoration company known for its custom luxury builds, including bespoke Defenders, Range Rovers, Jaguar E-Types, Ford Mustangs and Toyota FJs, announced today its financial results for the first quarter ended March 31, 2024.
Company Highlights
Revenues increased 207% to $8.3 million in the first quarter of 2024, compared to $2.7 million in the same year-ago quarterGross profit increased significantly to $2.5 million in the first quarter of 2024, compared to $0.3 million in the same year-ago quarterGross margin increased to 30.1% in the first quarter of 2024, compared to 10.4% in the same year-ago quarterNet loss was $1.6 million in the first quarter of 2024, compared to a net loss of $1.1 million in same year-ago quarterAdjusted EBITDA (a non-GAAP financial measure) improved $1.4 million to $0.4 million in the first quarter of 2024, compared to Adjusted EBITDA of $(0.9) million in the same year-ago quarterAdded classic American muscle cars through our acquisition of Brand New Muscle Car and classic Toyota FJs to the Company’s product lineup through a licensing agreement with Black Dog Trading
Management Commentary
“The momentum we established in 2023 continued into the first quarter of 2024, evidenced by our 207% increase in revenues to a record $8.3 million and significantly expanded gross margin of 30.1%, which is among industry leaders like Ferrari and other luxury auto brands,” Scott Wallace, CEO & Founder of ECD. “As we move ahead, we will continue scaling our existing footprint to maximize the business model, while also looking at growth opportunities in the larger classic car ecosystem. Already in 2024, we have added opportunities to expand our classic car product line through the acquisition of assets of ‘Brand New Muscle Car’, adding classic Mustangs, and a licensing agreement with ‘Black Dog Trading’, which added classic Toyota FJs. Not only are these opportunities important to our growth plans, but they provide us the ability to maximize our existing manufacturing footprint and scale in a capital efficient manner.
“To give some context on the opportunity in front of ECD, we estimate that the classic car ecosystem represents a $15 billion market, encompassing manufacturing, storage, brokerage and financial services. As we fill the factory, build out our product base and leverage our respected brand, we will aim to expand our offerings beyond manufacturing in the resto-mod industry, and ultimately, become the trusted luxury auto partner at all phases of ownership for customers.”
Full Year 2024 Guidance
The Company is reaffirming their guidance and expects 2024 revenue to be $33.0 million, representing an increase of approximately 108% when compared to revenue of $15.1 million in 2023.
Financial Results
Revenue increased 207% to a record $8.3 million in the first quarter of 2024, compared to $2.7 million in the first quarter of 2023. The increase was primarily due to a higher average selling price per vehicle by $63,071, as well as increased production due to efficiency improvements.
First quarter 2024 gross profit increased significantly to $2.5 million, or 30.1% of revenue, compared to $0.3 million, or 10.4% or revenue in the first quarter of 2023.
Operating expenses were $2.5 million in the first quarter 2024, compared to $1.4 million in the first quarter 2023. The increase in operating expenses was primarily due to higher general and administrative expenses related to the Company’s growth and expansion of operations, as well as ongoing costs related to being a public company.
Operating loss improved to $0.1 million, compared to an operating loss of $1.1 million in the first quarter of 2023. The improvement was primarily due to a higher average selling price per vehicle, improved gross margins due to a decrease in per truck material costs and efficiencies in the build process.
Net loss for the first quarter 2024 was $1.6 million, or $(0.03) per diluted share, compared to a net loss of $1.1 million, or $(0.05) per diluted share in the first quarter of 2023. The change in net loss was primarily the result of interest expense affiliated with a convertible note.
Adjusted EBITDA improved $1.4 million to $0.4 million in the first quarter 2024, compared to Adjusted EBITDA of $(0.9) million in the first quarter of 2023.
Cash and equivalents on March 31, 2024 were $5.6 million, as compared to $8.1 million on December 31, 2023.
About ECD Auto Design
ECD (NASDAQ: ECDA) is a creator of restored luxury vehicles that combines classic English beauty with modern performance. Currently, ECD restores Land Rovers Defenders, Land Rover Series IIA, the Range Rover Classic, the Jaguar E-Type and we have recently added the Ford Mustang and classic Toyota FJs. Each vehicle produced by ECD is fully bespoke, a one-off that is designed by the client through an immersive luxury design experience and hand-built from the ground up in 2,200 hours by master-certified Automotive Service Excellence ("ASE") craftsmen. The company was founded in 2013 by three British "gear heads' whose passion for classic vehicles is the driving force behind exceptionally high standards for quality, custom luxury vehicles. ECD's global headquarters, known as the "Rover Dome," is a 100,000-square-foot facility located in Kissimmee, Florida that is home to 89 talented craftsmen and technicians, who hold a combined 69 ASE and four master level certifications. ECD has an affiliated logistics center in the U.K. where its seven employees work to source and transport 25-year-old work vehicles back to the U.S. for restoration. For more information, visit www.ecdautodesign.com.
About Non-GAAP Financial Measures
The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used to evaluate companies on the basis of operating performance and leverage.
EBITDA is not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In accordance with SEC Regulation G, the non-GAAP measurements in this press release have been reconciled to the nearest GAAP measurement, which can be viewed under the heading “Reconciliation of Net Income (loss) from Operations to EBITDA” in the financial tables included in this press release.
Cautionary Note Regarding Forward-Looking Statements
This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “attempting,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.
Investor Relations
Brian M. Prenoveau, CFA
MZ Group – MZ North America
ECDA@mzgroup.us
561 489 5315
ECD AUTOMOTIVE DESIGN, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
March 31, 2024 2023 Revenue $8,308,039 $2,707,326 Cost of goods sold (exclusive of depreciation expense shown below) 5,831,100 2,403,234 Gross profit 2,476,939 304,092 Operating expenses Advertising and marketing expenses 343,409 105,220 General and administrative expenses 2,176,945 1,316,507 Depreciation expense 47,654 27,308 Total operating expenses 2,568,008 1,449,035 Income (loss) from operations (91,069) (1,144,943) Other income (expense) Interest expense (970,777) - Foreign exchange loss (4,704) - Other income (expense), net 48,526 22,377 Total other (expense) income, net (926,955) 22,377 Loss before income taxes (1,018,024) (1,122,566)Income tax expense (532,280) - Net loss $(1,550,304) $(1,122,566) Net loss per common share, basic and diluted $(0.05) $(0.05)Weighted average number of common shares outstanding, basic and diluted 31,896,640 24,000,000
ECD AUTOMOTIVE DESIGN, INC
CONSOLIDATED BALANCE SHEETS March 31, December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $5,560,321 $8,134,211 Inventories 10,914,086 11,799,304 Prepaid and other current assets 346,657 34,006 Total current assets 16,821,064 19,967,521 Property and equipment, net 981,801 968,677 Deferred tax asset - 515,444 Right-to-use asset 3,675,559 3,763,294 Deposit 77,686 77,686 TOTAL ASSETS $21,556,110 $25,292,622 LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable $995,777 $768,808 Accrued expenses 1,330,255 687,000 Deferred revenue 13,983,645 17,596,512 Deferred tax liability 16,836 - Lease liability, current 324,791 314,903 Other payable 1,465,098 1,533,815 Total current liabilities 18,116,402 20,901,038 Lease liability, non-current 3,641,602 3,727,182 Convertible note, net of debt discount 11,117,460 10,683,452 Total liabilities 32,875,464 35,310,993 Redeemable preferred stock, $0.0001 par value, 20,000,000 authorized shares; 25,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023 3 3 Stockholders’ deficit: Common stock, $0.0001 par value, 1,000,000,000 authorized shares; 31,899,662 shares and 31,874,662 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 3,190 3,187 Additional paid-in capital 249,997 - Accumulated deficit (11,572,544) (10,022,240)Total Stockholders’ Deficit (11,319,357) (10,019,053)TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT $21,556,110 $25,292,622
Non-GAAP Reconciliation - Reconciliation of Net Income (loss) to Adjusted EBITDA For the three months ended March 31, 2024 2023 Net loss $(1,550,304) $(1,122,566)Excluding: Interest expense, net 970,777 - Income tax (benefit) expense 532,280 - Non-recurring fees 408,936 210,099 Equity compensation expense 80,000 - Other (income) expense, net (48,526) (22,377)Foreign exchange loss 4,704 - Depreciation 47,654 27,308 Adjusted EBITDA 445,521 (907,536)
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