LMP Automotive Holdings, Inc. (LMPX) on Q2 2021 Results - Earnings Call Transcript
Operator: Greetings, ladies and gentlemen. Welcome to the thank you for standing by. This is the conference operator. Welcome to the LMP Automotive Holdings, Incorporated Second Quarter 2021 Financial Results Conference Call. All participants are in listen-only mode and the conference is being recorded. After a presentation by management, there will be an opportunity to ask questions. Before we begin, I’d like to remind everyone that this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking statements. And, of course, forward-looking statements involve risks and uncertainties. I would now like to turn the call over to Mr. Sam Tawfik, LMP Automotive Holdings Chairman and Chief Executive Officer. Mr. Tawfik, please go ahead.
Sam Tawfik: Thank you, operator. And good afternoon everybody. And thank you for joining our call today. Today's call participants, along with myself will be Richard Aldahan, our Chief Operating Officer; along with Robert Bellaflores, our Chief Financial Officer. I'm pleased to report another record quarter. Second quarter revenue adjusted EBITDA was $140 million and $11.1 million respectively, which translates to a $1.10 per share. On an annualized basis in the second half of this year, we're expecting revenue to be approximately $610 million and adjusted EBITDA of $44 million or $4.38 a share. We ended the second quarter with approximately $24.3 million in cash and $46.9 million in adjusted shareholder equity. The company is generating significant cash flows and as of August 10, cash, including Escrow deposits for acquisitions totaled, $97.6 million. We expect to begin closing some of our contracted acquisitions previously announced beginning September on a rolling basis and our goal is to have substantially all of them closed by November of this year. Upon closing of all the acquisitions, we previously announced, LMP’s total franchise dealership and retail and fleet operation location count would be 28 and 21 respectively. With expected consolidated annualized revenue adjusted EBITDA and adjusted EBITDA per share run rate to be approximately $1.4 billion, $88 million and $8.4, respectively. These acquisitions will strategically add density in key geographic markets and increase our regional footprint. Our pipeline of prospective dealership acquisitions is more attractive than we've ever seen. And we believe we're on track to achieve our goal of 80 to 100 locations within our network, by the end. By way of mergers, and acquisitions and partnerships, we project these additions to our network combined with our current operations and contracted acquisitions on an annualized basis will propel the company to a total of $6.5 billion to $7.8 billion in revenue; $317 million to $376 million in adjusted EBITDA or $16.84 to $19.4 a share in adjusted EBITDA. Now I'm going to pass the call over to Richard Aldahan, Chief Operating Officer.
Richard Aldahan: Thank you, Sam. And thanks to all those who joining the call. Before I give them the details, I would like to thanks our dealers for their strong performance this quarter and year-to-date. Additionally, I want to thank every member of our corporate team for their dedication and their contribution to our organization. So far this year, we continue to see demand outpacing supply for new vehicles. We expect this to continue into 2022. We believe this is due to the pent-up demand from a large percentage of consumers who had the further vehicle purchases in 2020, in addition preferences for transportation due to the current suburban housing migration and due to the component supply shortages within the manufacturing process. I am happy to report that we continue to rank in the upper 50 percentile as compared to our public industry peers. So, all of these notable metrics include the following, our revenue growth percentage as compared to previous year’s comparable quarter; our gross profit margins of 18.9%; adjusted EBITDA margin ; adjusted net income as a percentage of revenue of 6.2% and gross and net leverages as compared to adjusted EBITDA. We ended the second quarter with our corporate debt, excluding and of about $97 million. Approximately $49 million was associated to the real estate we acquired and the balance of approximately $48 million for our dealerships that we had purchased. We believe this ranks LMPX amongst the highest returns in invested capital amongst our peers. We are witnessing the results of our partnership acquisition model that we feel unleashing the real potential of our partners and the dealerships that we . And we guess the best is yet to come. Thanks again for joining the call. I will now open the call for questions and answers. Operator?
Operator: Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. Our first question comes from the line of Mitchell Berger, Private Investor. Please proceed with your question.
Mitchell Berger: Hey guys excellent quarter that you had. I'm just wondering obviously you guys noticed the stock prices is not really valuing the company at the right levels. Are there things you guys are going to be doing to get us to be fairly valued at some point?
Sam Tawfik: Hi Mitchell, this is Sam Tawfik. We continue to be focused on executing the business plan and growing our income and as far as stock price, typically from what I've seen historically in the stock market in general, the stock follows earnings. So, we're focused on execution of the business plan as a company. I hope that answers your question.
Mitchell Berger: Keep on doing what you’re doing, I guess.
Sam Tawfik: Thank you.
Operator: Thank you. It appears there are no further questions at this time. Do you have any closing comments?
Sam Tawfik: Thank you, operator. And thank you everybody for joining today's call. See you on the next call.
Operator: Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
