LOTZ - Earnings call transcript Q3 2021

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Operator

Good day, and thank you for standing by. Welcome to CarLotz Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. you. Thank Instructions] [Operator like today, the Ms. now your over first speaker to would conference hand to I Susan CarLotz. Vice Lewis, President, Investor Relations for go ahead. please Ma’am,

Susan Lewis

is Tom Stoltz, Thank on Financial Officer. Chief everyone. afternoon, Chief Officer Michael call Executive and you. and Bor, CarLotz; With of Co-Founder Good the me

be Before started, which conference historical The those which with. statements XXXX. the in press as the suggested comparable to in in this used are filings I’d information measure to with release. such differ remind measure today’s non-GAAP company’s may not of the deemed a includes provided familiar company’s we presentation Harbor described of you’re financial materially language, statements most measure will risks future Actual Securities may meaning statements due all which to forward-looking get of number call, facts the are the SEC, our a Safe from release. results of of this in which be Litigation like within call, you supplemental is of to I’m financial financial constitute directly sure If press contained Act on this any Reform non-GAAP the Private financial all and GAAP uncertainties,

call Now, and the would of I like Bor, to over Co-Founder CarLotz. Michael to turn Chief Executive Officer

Michael Bor

year-to-date. team you both want have us to by from the joining we our has quarter I year inventory and discuss for the results. by and to during start I’m Thank an thank you, saying everyone, accomplished encouraged this quarter Good Susan. third XXXX that what faced afternoon, standpoint, headwinds our despite

objectives our This of F&I for in unique year. more disruption supported the of growth between the revenue transformation. footprint, footprint record with more technology increase During in our several tactical this the our last brand compression in to We awareness the than deal. sold revenue was in exciting million revenue we in Even half revenue model. however industry great a growth the XXX% versus XX% a $XX create increase ongoing started third pricing make All than hub business accomplished by and year XXX% caused doubling quarter, year, consignment our stakeholders double units us our retail with and by hub chip the first and more of achieved year. shortage typical margin changes. The through and wholesale challenges, significant value to these for we’ve caused last

eight a base opening total First, we of current our for XX the year-to-date XX versus start doubled more of hub units than year. only at the

but third this Atlanta. announced, During Fourth Denver, opened yet and have we opened couple Pomona, hubs California, more in Plano, a year. that and large Louis we the St. in hubs Texas have we’ve quarter-to-date, quarter and opened specifically, not

While increased inventory of we by XXX% larger increased capacity the have hubs our XXX% number by year-to-date, hubs. we these have with

in Second, our we also talented proficiencies. while new build product development, out and to hired marketing areas expertise expanding finance teammates like technology many

front the teammates conversion, We in hubs driving growth supporting line who unit significant on hired have many talented and the been sales also in lead F&I.

to the are We’re we staffed more one shortages, than of U.S. greatest proud labor we as that midst of in the the fact continue XX% of grow.

business Third, and model. brand to we on a of have focus launched our designed awareness campaign the increase marketing consignment our

country on challenging As the have and Fourth, to technology enhancing grow. our increasing of appropriately and more what the know do CarLotz website. to how are for it focused our our functionality engagement name There’s and flexible we source around been don’t And headwinds car do fun the business to but stock model mean on navigate consigning in inventory certainly watch focusing for more to them. they experience consumer know we lastly, It’s transformation nor new the and consignment user improving been and increasing on introduce conversions. technology markets, we continued we could our their even people markets unique enter we’ve and roadmap, value money most proposition the hubs.

we the can when normal, have signs back unit sequential shortage and fourth is And can’t problem. attention the things deserves solve during non-competitively improvement encouraged I’m the the While by still be into work of the chip getting to predict the that companies quarter. will seen that month it quarter from source each to anecdotally the

elaborate Now, me given business sourcing, on importance its model. let to our

consigning to vehicles one from our between also to up prices accounts with were of which and the our seeing we increased as retail in As top a affected of compression margin sources, wholesale sourcing traditional inventory fill auction that you’ll QX, necessitated us inflow hubs inventory. our in significantly paused recall the

to face we the in improve reliance As options to of have worked this sourcing source made all our vehicles. of channels on progress we in lessening our adversity,

growth was vary and attractive in increase past past. the the of XX%. result of In in While making sourced our seasonality accounts, is than quarter in unit rekindling is new and the in environment wholesale while and less needs XX% that of recent can sourcing consignment October pricing account a about this sourced part retail than a the more prior non-competitively on number monthly auction, inventory based being flow June at

paused As relationship XX% consigning the about partner our sourcing now again accounting the is October. pricing volume returned our last has the we and who of our mentioned call, for height wholesale on in disruption during of

variety partner GPU and QX focus primary sourcing a through In new inventory, for partners QX. from the the consumers corporate given consignment attractive This in in while relatively addition, trade-ins encouraging from mix, the of Also is us sell is and increase added sourcing in sourced generated perspective a units. through, have these faster we purchases. from to corporate than units sourcing higher our more seeing pilots

in placing going forward. on efforts growing As consumer are brand growth in consumer grow we combined our to continuing name vehicles recognition anticipate and markets with sourcing, source new we our see unit our the

While pressured QX during improved our for is the Historically, majority in and QX, last reserve, because an inventory auction the or resulted incrementally of the in consigned owned. inventory sourced reserve GPU at QX versus significant versus a market. of retail have we owned purchased inventory increased two lower not our at have inventory during the needed non-competitively cost quarters units been

factors over owned, With the and the follows. reserve. depreciation units on caused our the were as to associated that inventory we shift these last more price owned quarters two The increase units the increased

and of depreciation to and These desirable source less sell. First, purchased experience longer amount high. inventory we at units significant than can can higher while days auction be or prices consumer vehicles were a wholesale auction commercial

inventory In we historical and average factors have price average. higher resulted vehicles purchase addition, at points in the of our our in age the reserve. increase the increasing than These

our may on you gross market on inventory in profit Including still of during of divides or the third know, reserve sheet the use GPU was cost QX, sold it $XXX. the retail lower reserve in inventory $XXX,XXX the As to that increase by retail booked the the and retail calculate GPU balance quarter. our includes unit recorded

was units retail inventory reserve, increase actually in in for the GPU $X,XXX. adjusted the the sold QX our Excluding

improve discuss, Tom the in will retail QX. to As QX GPU we expect versus

reduce we are should units inventory levels retail progress the and through inventory selling are growth to to to and making channels, GPU significant more we next these our normalized profitability. be QX, saw we in aged months. continues able pressures we the several retail our along F&I. that in strong The aged the backend QX, to over on quarter, While offset is sourcing agent wholesale this newer with good Like to see inventory the

mentioned technology an products we training, services. and F&I have added new several on increase and contribution we last As our seen products penetration increased dollars our call, in enhanced from we increase as and

results the better more they options, conversion to are to and in We to diverse majority these rates, profile the we this the QX, the financing at conversion help meet by our expect which expect the submitted serve financing guests, these for end rates. at find will us we while who lowest of themselves continue have who without and the accounting several products hubs more serve right With online. extremely needs guests, guests, our of momentum better credit with lower improve to credit spectrum. pleased of partners will Previously, the adding look

just XXXX. our value Even Some QX on and board financing have with of disruption more come of all model for and about drive partners have of experienced long-term optimistic will to early the I we QX our long-term XXXX remain these industry consignment business opportunity year, during be stakeholders. added this the

seen we to call, that that QX from market set normalizes. we a prevent model the when structural in on As have returning us industry our the would not change

better even the will of aspects are emerges We us that in industry across all when making to chip allow be an our investments from the shortage. business position,

the expanding consignment these a business difficult new us corporate do and increase done in be our the These crucial our And new maintaining challenges, inefficiencies more we relationships process. year, further us remiss in factor hub has more in finding of hubs, in market hubs sourcing I model larger the more be marketing mature increasing remarketing core and will to to retail our fill know, the units you our our and have current job capacity As than consignment in and establishing allows. initiatives. are relationships didn’t allowing work both of footprint have as if address mix our to number this and great house in due processing discuss are has partnerships, team our industry invested pilots. markets markets been while a new to corporate would I allowing

We offering. the will person. on marketing first by awareness it aims brand campaign car preconceived platform people vehicles and which to a used notions that leads good and increase remind major of be team debunk to investment driving that and big us launched pre-owned this introduce It’s brand our geographies about have quality in our unique focusing on and The increased people feels campaign, conversion. to our allows a to help build key

are experience the We Tom? our results. initiatives I’ll turn our to executing look in place our now call on model. used financial through forward differentiated customer our this and to plan to present of goal. provide to growth business to best All achieve Tom investments over car the

Tom Stoltz

Thanks, Mike.

our regarding Investor our please of details press release our section refer website. full For in available the results, Relations to financial

increase XXX% unit Retail an million, $XX were were XX% of of revenues quarter, versus third increase last sales year. year. last X,XXX versus the an For

period purchases the auction was QX of which revenue are Gross Gross the $X through $XXX. of owned profit the XX% year-over-year grew growth vehicles, the XXX%, given million was QX. unit QX during inventory and increase month new the sales growth headwinds XXX% F&I volume in growth primarily same nine by to industry the on of profits into hub driven were as was end of increased increase XX% significant negatively For compared and quarter. and These and of offset front lower challenges inventory the profit by impacted large GPU macro year-to-date the in and revenue period, in now by reserve XXXX. Revenue XXX% for and ASP driven retail profits, increase F&I including the reserve, aging QX, discussed already is $XXX,XXX. in the by

reflecting the the quarter $X,XXX. GPU Excluding reserve, in was unit the sold the retail inventory in adjusted just increase GPU on the

loss The support quarter increase due and increase related versus our staff expense is an and compensation for last versus in to $XX.X EBITDA $XX.X year. in $XXX,XXX the support last period strategy. loss in primarily is a loss Net was compensation Third also expense last was to the stock loss million SG&A million. third the same in depreciation growth expenses. million quarter QX in for excluding SG&A SG&A increase $X.X of to by of home period was the year increase year. technology a adjusted same for employees The $XXX,XXX versus driven marketing

cash At were sheet. our and which marketable us securities balance the $XXX million, rise to turning continues Now end, to with flexibility. quarter

to the $XX to We under floor $XX floor our end of million had million continued plan. we our vehicle the plan support utilize outstanding QX, purchases. At

consignment. year, our moving earlier, inventory to this was Mike primarily QX reserve, inventory inventory and until explained as Now of

Our QX, became inventory versus owned mostly consigned. composition reserves were our inventory insignificant when until

Our has valuation by impacted owned of factors. a inventory been couple

rising. These First, purchased were a at prices purchased significant of we inventory less auction can sourced auctions, units. be amount from than units non-competitive desirable when wholesale

in longer seeing result, units. price purchase auction on addition days a are to these As to depreciation we sell

take increasing Secondly, inventory longer higher percentage reserve and meaningfully price by and a from perspective units in are factors can points, of at of unlike depreciation. impacted in QX. have sell QX, more These absolute the dollar the which we higher age to resulted inventory an

towards shifts increases large we inventory inventory, not not do our forward, Going large do owned expect and expect therefore, reserve. we in

our profile ready ending goal for significantly inventory with aged efficiently higher inventory the managing first of more improved year the seasonally the a quarter. are with We and

today, regarding While this guidance uncertainty we the we guidance comprehensive continued issuing chain, given have provided not some qualitative our time. are at supply

However, guidance on expect we QX retail summary, we In in in retail improvement expect to our in XXXX. units sold of provide and sequential call March GPU quarterly QX.

to spend market how flexibility we to in manage We and be in capital conditions continued with through XXXX will maintain our disruptive and expect than continue and hub we to fewer have openings corporate judicious XXXX. the allocate

to should footprint. us existing focus I closing now greater will to for and on Q&A. back enable the the Our a productivity hub Mike our XXXX hub and have growth opening comments call turn over schedule of

Michael Bor

best focused unprecedented across maximizing has investments place, have this awareness Operator? made certainly take your shortage offering industry customer are consignment questions. Thanks to the We’ll we the returns predominantly significant We the Tom. the forward our already on In and assets the consignment in model we chip CarLotz now and summary, in year, on the while as of the caused industry, chip the disruption leveraging shortage experience to a resolved. building is what means. business look name returning

Operator

question Thank you. comes of Please question. Research. proceed the your Your from first Barrington [Operator Instructions] Gary Prestopino with line from

Gary Prestopino

How you? Good are afternoon, Tom. Mike,

Michael Bor

Doing well. Thanks.

Tom Stoltz

Doing good.

Gary Prestopino

a just couple questions here. Mike, of

like is hot getting some onto terms sale this right In the earlier are – why for to in also so depreciation the market are understand of cars prices, I’m car to you issues through the had just seems shelves. when year, now. used getting sites still because the everything ready trying off and – you onto experiencing experienced just with website every flying the and you be the

Michael Bor

Yes.

for ready for then to say, as run also we answer in – the quickly. for So meaningfully the part the sale. our second equipment year. time over get car large inventory we on gotten QX launching as it course have getting To a hubs the hubs new did, people with overwhelmed getting buckets and to We cars in our kind cars our would less as our started to that new to new the so cars hire accounts, year, we’re takes forced a startup were centers we pricing been result of a our and hubs legacy – hubs technology, processing consignment performing through and trying lot of were actually new steadier the for a to challenging ready pause of QX in the not we and when bringing sale the our your The like QX in also of as have volume going get have very the sale technology the in of at cars auction time built they that were as and most equipment hired to retail cars of the sourced year teammates us were vehicles. cadence much time auction desirable has are ready to seeing question, and place when has we’ve down we awesome at inversion. in earlier the hubs at matured, and many a was wholesale frankly cars in been new the and well of I up temporary top one due addition come buy

through and great just same vehicles bit a a not while QX longer same, and some trim we for were price, very into all built so level, are sell. vehicles not desirable have was a And taking quickly of QX really vehicles there vehicles that the on bleeding brought lot are to all vehicle selling that a the

inventory, combining all And bleed inventory seeing to that a nowadays so that shifting sourced with we’re through bit getting came inventory we’re improved. that then as early non-competitively we and and seeing the more that little that in consignment of we’re it

Gary Prestopino

commercial terms as the would new they or assume not is One from that case, this accounts they’re not side. the the getting to some less on price side getting coming And you, these or realization thought could. you’re well they they’re the of of Okay. legacy business, more back account then in getting accounts that that auction desired the some the as results of

Michael Bor

normal close environment higher in even or a Well, will normal, to be retail wholesale. than

between this So then gap what retail, we’ve wholesale the and that year that’s is years a a in first seen being we the early part there of of nine where add. and the – and really value since that’s really business, is

some seeing send So difficult needs cases, make in were wholesale we’re was that remarketed be the it in above when that to very when a many to – the – to QX, decision to prices retail. retail, car

wholesale We have seen not than retail. higher inverted,

And last over our the looking that stable they they last at what several when between would been wholesale. can vehicles to several months more accounts. we’re wholesale seen to It accounts them volatile becomes over retail $X,XXX definitely lift could – we’re gap and have our that see, we to time able little even We make the the more been drives plus a but has make send show over like wholesale. lot than to and months when a with has in forward us value

Gary Prestopino

Thank Okay. you.

Michael Bor

You’re welcome.

Operator

Thank you.

with comes from the line from of question Your your Deutsche Rosner question. Bank. next Emmanuel Please proceed

Emmanuel Rosner

question Thank you’re this model. on you for very seeing the first My much. environment is consignment

sequentially could remarks some reach you’re suggested more least bit if little price a is wholesale I wanted earlier your you give new improvements just continue color us seeing obviously, that of there, there. some think records. at know, to I to

conditions improving of model? sort for are that seeing you are what the guess, I so consignment And

Michael Bor

with end was there a One, to we legacy they have And period it for think many of sending a that years. about working sources. in comes because day, wholesale prices different where the had Yes, from really a earlier such were dramatic vehicle have rate. accounts the year, retail, been at us the at hard really a to the couple increasing

Now, where a wholesale that’s eventually the and there’s and and retail gap between value. retail price we add adjusts

midyear. our over we kind commercial saw were XX% QX, that since of in then, account significant so low vehicles sourcing. And seen ever we the as improvements inflows of – And was that that. as our we’ve of And

As remarks competitive of than less through are channels. vehicles our XX% we’ve now mentioned in our sourced

we year commercial to that’s than and our from were much And the starting value seeing less to to have consumer the gap So from who significant nice sourced vehicles auction otherwise if more between would’ve getting accounts and we’re now getting because we’re – vehicles. more was improvements auction these in too earlier be the we’re getting to also from able and retail wholesale sent provide narrow. that accounts they in

Emmanuel Rosner

I of be bit deeper And October. and one just And we’ve on the in part sourcing another a near a maybe thinking up but Tesla decent little little seem September Understood. they hubs concentrated California. on two during like website CarLotz the in noticed ramp vehicles guess, anecdotally, and to

this Any how comment are to to they’re units, And they’re so sourcing? from and Tesla. on whether you ramp manager by and if dealing owned color the and coming you’re fleet able of with this you able from consigned quick concentration provide in are company in coming a light geographic very or these or are

Michael Bor

it. over excited time. And to Well, seeing this we are transition we’re Sure. EVs many about like very

to have play buy be electric big who Our the cars for future demand a great guests, in think part of it’s us transportation. people We from going vehicles.

company on on we us year up began us three was results a only just managed to company, open. models was well, it’s of at test out four Tesla’s new Coast, were had – through sending of the hub California couple we’ve bunch vehicles financing in The what the – our two Coast, A the West time began could a West we’ve these old great be. it different the Bakersfield year, picked accounts. which, sending one As or specifically, or this some

in saw hub of terms account. sold used them, Bakersfield They lift And days that results both the good so very our first for many we the for sell. testing and ground to as from this we

because the started to sending geographic few opened they growth is great, talked weeks actually we one we there. Pomona for results and some more key them around vehicles. have really is – inventory the started attractive of And to as now vehicles, benefits more sellers we that been being so that country. which country, us our sending the expansion of of – then about our makes their around able spread And a And the location about a our send part ago, to we we’ve strategy clients when it talked started be

there’s seeing country though, of sending their even vehicle cost so ship Texas, the meaningful sale tremendous more so truckloads Chicago, vehicles. can generate vehicles. spread to around And around a they’re And eyeballs this on Florida, we a to California inventory and lift the that on from these we’re

account for So it’s been us. a new great

about We’re And relationship our account. very we future new it. this for excited with see a bright

Emmanuel Rosner

so is are I guess, these my understanding right? consigned Is And vehicles. that

Michael Bor

They vehicles. That’s consigned are right.

Emmanuel Rosner

Okay.

of what these this account successful outcome a from And would so partnership significantly? grow – could the inventory in be

Michael Bor

I a in of a testing repossessed they’ve – They they’re old vehicles well. But us all so been have types of company. they bringing Yes. as mean, three but not other just Teslas, some as vehicles, two, vehicles. have their financing They of vehicles been year specialty They’ve it’s been just they’ve well. manage Teslas. lot

So we’re out. account excited of really this about branching kind

their of most vehicles on the are Now, West Coast.

magnitude types seeing the unless, of the Teslas vehicle kind we it. across that probably lift or on of the West Coast close So They’ll the the of types. to lift, other on stay see we’re

locations two We in California. have

of kind in Seattle a of we’ve some have We announced locations announced we’ve and that and other other Rockies. west the in some location are Denver

of country. most those be we’ll the lift, vehicles but the can inventory to show stay that we extent, in the around will spreading probably region, significant So

Emmanuel Rosner

Thank you very much. Great.

Michael Bor

welcome. You’re

Operator

Sharon The Zackfia next Thank comes William from your line question. you. of proceed Blair. the with question from Please

Sharon Zackfia

afternoon. good Hi,

trying a on to hold sorry, I missed the first I quite was the get bit of for I’m part call. in. So

not a terms are you the asking of answered. can dialing XXXX, openings in in that how committed point? any metrics down have with bit? many are So And leases? ramifications something pullback any financial at that hub already on fully you there mean, give you’ve you us signed I But this on leases I’m already from hopefully,

Michael Bor

Yes.

many-months the It frankly, many scheduled So we open, some a as many be know, the opening year. is as can of years, in But and have process. process year hubs, of you into we’ve cases. you to that know, in throughout next cases, rest this leases

from commitments we’re pulling that So not back any we’ve made to-date.

We’re excited about year planned the few this the with of us, And into year. was have dramatic far opening hubs way. that on rest the next so year we a and for for a year more this growth XX

for we full year openings We’ll as also plan year talk saw information on a hub as the big in rollout it we us, not growth terms more this Next about the year. of be as just new was hub will big year next year. new have when early

Sharon Zackfia

customer in multimedia, comment of pervasive, that at to the you’ve seen you on area. I lot I’ve response campaigns kind then did know, Chicago billboards And of of the all ad the helpful. That’s having kind a more been

curious website or that? if any traffic traffic on the you’re how just on either to I’m analyzing ROI been you the So stores on, can, have you and how driving that’s into metrics the if

Michael Bor

understand too to starting early do. anecdotally and an positive awareness are we’ve are like to gotten terms tell, from visits, probably in Yes. still to guests who XX%, We’ve what increase. it visitors up seen we’ve Unique feedback seen example. for unaided of we that is very But site

sense a a which what And of that pride campaign person, It exciting obviously connotations. that so do, has to we negative historically allows it’s makes we and gain it car it’s is think people. of lot to really let being understand had and kind used a them

rolling certain pretty in you’ve obviously we’re about rolled markets, out being excited seen So it It’s it out. Chicago. in

we’re about far, early so results. the And excited

Sharon Zackfia

Okay. you. Thank

Operator

you. question Karen line from Instructions] Thank comes question. your of with Short The [Operator next Barclays. proceed Please the from

Karen Short

thanks. Hi,

a actually respect like if Just what with update versus could I getting been give to a ready on it car wanted sale timing to would’ve see for little earlier today if little year. of a of give a that. color the obviously on terms insurance, color bit so improved that then wondering just in And could and you finance in significantly, little you

Michael Bor

were the year, say Well, we Sure. inflows – over they at big had vehicles not coming regular weren’t cadence. that a evenly of last I’ll in

put definitely year eight year. we hubs surges that last we kind grow. had And that That and So hit was several ensure enable technology really our we in-house done processing be of One, to process more versus was the work volume three that grow – vehicles all part to did quickly things that hubs in the us end at and talented Then we very this year, more equipment of of course kind very people centers That’s backend, this early the some know we’ve down. these – slowed that had over what we of the into to have do. of tech few was Two, inventory when to we’re can to our to to huge it that our spread of like can of down and want take processing team outsourced. was working a over inflows and was don’t need center. one consigners, internal. inventory any inventory with and that evenly we in the hubs things. it that hiring And then inventory working hard that with bogged inventory of of we our very and ensure the

just anything it’s new while needs centers, of ones little – that have of a working for with time processing a like around going to to than kind new with be well. just been bit slower get Now little a always the processes

hubs within our definitely have a to this anomalies. sale the mature ready obviously required to coming year time mature, these we’re we At a like that get days. lot seven open hubs, see as We we a get starting vehicle sale ready so up on the And of for to for vehicle website down.

bit start more takes in with evenly result able We vehicles when others in technology, how longer get hubs, we vehicles shooting we’re them our than of different quickly, that needs our for have day obviously probably these reconditioning so to sold turnaround average it bit we but quickly, people, that, that time be is as car. – seeing out a But or very long week certain that investments spread one At that little are equipment, inventory given well, specific quickly. we’re determining a for ensuring that we out, we’re ready on the needs. a process new can can quite that that then any a two and take and

Karen Short

helpful. And That’s Okay. on the…

Michael Bor

Sorry.

the On F&I.

Karen Short

Yes.

Michael Bor

new online learning Yes. so No. more Yes, addition working our and backend to our about experience and out that F&I earlier And easier. closely your the launched and – we we very made with financing that in website, the training became this year huge intuitive it, our our figuring vendors and when penetration in to GPU continuing F&I can increased profitability supports we improve. on great that tell, our as make back. definitely the way. the It’s a we you And benefit us book a that see – has increased and to

Karen Short

type that in helpful. we just of kind me. I thing. consistently Okay. hubs for And help but us you’ve mean eight have to know saying is there modeled fewer one any of I any would XXXX, that? be color on been pretty then other But way frame

Michael Bor

be this talk we’ve that plan about on full The it are that going we year, announced to talk have XXXX, more about we opening year. not when that, – we’ll for hubs Yes. the already

announced we’ve we this will several few next We that that more year. are have – a be but have year,

the So you rollout is baked. we’ll when But year we full to internally about again plan talked is the like year. talk early of part the QX

Karen Short

Thank you. Okay.

Operator

Barrington line Thank Research. Please of The comes with Gary next you. the question from ahead. go Prestopino

Gary Prestopino

the being just how sellers? retail wanted commercial, that questions follow-up consignment, Yes. here. Mike, some starting mean, I are the the consignment consumer you has model, accepted not is mean how with some there? I to commercial I get just traction

Michael Bor

Yes. spent dealership easier. year Gary, our that very or consumer earlier in volume, marketing manage what’s out on We’ve talented and time us it’s build we’re started. brought consumer team as the our seller – great consignment otherwise on that sell traditional a buyer about offering consign found we lot a business product for the the the I gets had were essentially we creating of to And help consignment somebody, the consumer know, go to at would a We a help – volumes alternative. they part a we this a resources seeing the lot lot DNA into vehicle their And business. our business We’ve just the consumer that’s And beginning kind offer vehicle on of you sourced of decent really how money to two this of bring consumer that is the left year, great fans. makes segment. that best that And the we product its more much you’re and The you hired and that when part that’s our to XXXX. pay making to next than we a process. more would’ve decided just initiative. people we for. assignment to as commercial own. energy the lean a of can say essentially of And consignment and XXX% back of piece back in, we huge grow

in So – build it’s bring – model great base is your business it’s fan you what’s – fan very, very market consumer quickly. helps about your a the new it

it campaign this the in lead that. vehicles. lot year a increase leads, into certain we’re of seeing saw tremendous to stories And it more We would’ve thousands conversion. these on you in our made really selling they selling massive the we’re making of otherwise and sellers so than and like thousands for and people it who wins really leaned helps – see are team also in. a a some And internally. trade vehicle markets we’re for And with their specific – mean when doing exciting help in for it’s amplify whom it’s I earlier

we of go So DNA. we’re very part forward. awesome It’s it’s into lean one business. in we’re as an lean proud it. to And heavily of it’s very that continue to our into going definitely One, our –

Gary Prestopino

auction, safe say that really at it consignment cars this of October point? sourced is consignment you at XX% more of the commercial less versus majority this to were than is point, said But consumer in at your

Michael Bor

a but majority. commercial split consumer. close not yes, We the – split don’t it’s the not sources, it’s necessarily but it’s It’s mean vast commercial. It’s breakout specific majority and I evenly, between

Gary Prestopino

that given and Okay. made vehicles. early, to down, pretty of trying inroads was any that mean lot account I with said XX% it’s you commercial started to the then base one time that diversify wanted as account of consumer? left supply kind know this your your ask to cars. accounts? and Have stuff I about And commercial but think I I of just you a you came of writing back

that model your receptivity you could So would the to great. terms be in any consignment consigners reps color of commercial on among give –

Michael Bor

Yes.

in accounts grown mentioned So the on significant account paused we’ve across you business. But and our They of business. came new that – and existing as back. account been bringing The we’ve a accounts. the meantime, was our growing also a part

we’re have more past. we obviously vehicles selling And the than in so

now We They that of terrific back them. – for of well are works well. business And for sell XX% came is our pause They it’s and – have so account works us, – they now cars. sourcing. sort partnership well a the about great our

growth so multi that great grow locations. is. percentage rate many on of want more at to what it’s And grow. rate our to account. growth piece than it’s But going probably business Whether supply a what it’s depends vehicles us is the a to They we more their – at continue with

continue working So closely. them we’re to with excited

Gary Prestopino

you. Thank Okay.

Operator

question-and-answer to go does the now concludes please back our Michael turn Bor. session. this Thank And I ahead. Mr. like Sir, would to conference you.

Michael Bor

before our long-term And we optimism reiterate you. our the model. Thank call, consignment regarding end want just I to

environment to forward to effectively efficiently joining you we look the soon. necessary adjustments the speaking until And operate us to normal. to for making again you returns and today. We’re Thank

Operator

today’s This participating. concludes Thank call. for conference you

disconnect. You may now

CarLotz (LOTZ) 9 Nov 212021 Q3 Earnings call transcript