| Item 7.01 | Regulation FD Disclosure. |
In connection with the notes offering describe below, Carvana Co.’s (the “Company”) management will be making roadshow presentations to potential investors. Certain slides that will be used in making the presentations are attached hereto as Exhibit 99.1.
The financial information in Exhibit 99.1 includescertain “non-GAAP financial measures,” including Market Contribution and EBITDA, that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with GAAP. Reconciliations of thesenon-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with GAAP are included in Exhibit 99.1.
The Company defines Market Contribution as market gross profit less market advertising and last-mile payroll, transaction, logistics, and occupancy expenses. The Company defines EBITDA as net loss before interest expense, income tax expense and depreciation and amortization expense.
Market Contribution and EBITDA have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for analysis of, the financial information of the Company under GAAP. Because of these limitations, none of Market Contribution, EBITDA or any related ratio using such measures should be considered as a measure of discretionary cash available to invest in business growth or reduce indebtedness.
The information “furnished” pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and it shall not be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
On September 10, 2018, the Company issued a press release announcing that it is seeking to issue an aggregate of up to $300.0 million in a private offering of senior unsecured notes (the “Notes”). The Notes will be fully and unconditionally guaranteed on a senior unsecured basis by the Company’s existing domestic subsidiaries. A copy of the press release relating to the Notes offering is furnished as Exhibit 99.2 hereto.
The Company intends to contribute its net proceeds from the sale of the Notes to its wholly owned subsidiary, Carvana Co. Sub LLC, that will in turn use such net proceeds to purchase newly-issued preferred units of Carvana Group, LLC at a price per unit based on the offering price of the Notes before deducting issuance costs. In turn, Carvana Group, LLC intends to use the net proceeds for general corporate purposes, including funding working capital, capital expenditures, operating expenses and the selective pursuit of business development opportunities, including to expand our current business through acquisitions of, or investments in, other businesses, products or technologies.
The Notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain persons outside of the United States pursuant to Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws. The information contained in this Current Report on Form8-K, including the exhibits hereto, is neither an offer to sell nor a solicitation of an offer to purchase any of the Notes or any other securities of the Company.
Cautionary Information Regarding Forward Looking Statements
This Current Report on Form8-K contains forward-looking statements within the meaning of federal securities laws. Statements relating to, among other things, the offering of the Notes, potential changes in market conditions, and the use of any proceeds constitute forward-looking statements. For a description of factors that may cause the Company’s actual results, performance or expectations to differ from any forward-looking statements, please review the information under the heading “Risk Factors” included in Item 1A of the Company’s 2017 Annual Report on Form10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2018, and other documents of the Company on file with or furnished to
