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Polished.com (POL)

Participants
Albert Fouerti Chief Executive Officer
Maria Johnson Chief Financial Officer
Ryan Meyers Lake Street Capital
Adam Wilk Greystone Capital Management
Call transcript
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Operator

Good morning, and welcome to the 1847 Goedeker First Quarter 2022 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] On the call today are Chief Executive Officer, Albert Fouerti and Chief Financial Officer, Maria Johnson.

First, please note that various remarks about future expectations, plans and prospects constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform act of 1995. The company cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated, including the risks described in the company's filings with the SEC. any on of call the circumstances May no to made of only company that statements statements obligation date forward-looking today's XX, update occur forward-looking after this events speak conference as assumes to today. Any reflect these or of XXXX, and

first remarks these trends we purposes, for Second, our and a today. non-GAAP we which we special few results had reference results non-GAAP our in excluded in will items quarter from our

release from website to available press A At morning opening and and comments. So cautionary Albert Relations website on our please the be Fouerti. Goedeker XXXX cover Please this go detail. will this our Investor ahead, this Investor in for our conference turn see replay of week. more information I'll more Mr. these statement, Relations over which Fouerti call time, for the topics call the

Albert Fouerti

home not to EBITDA environment XX.X% market. than a of continued adjusted million, the for discuss addition underlying for executing call. of will capital and and today's the more I'm have XXXX, and thank morning shortly. performance in will drive representing that providing long-term am updates widespread to to our the quarter XX% first strengthen $XXX.X on $X.X gross for achieved we does a begin for detail of you In million. million financials fact quarter, macroeconomic net structure. the Maria the year. a and has over the opportunity of business by start The will of that results of further on tremendous first we increase in in key QX challenges I sales our which key I growth excited we Good creation. appliance its initiatives our results the proud $XX.X sales also believe joining income quarter initiatives financial discuss value at our of macroeconomic margin the team touching Despite change delivered and in XXXX, We combined

We and technology capabilities are to opportunity. going to lean seize into this expertise, scale

updates. Here few are a key

would selected that name, I brand plan like new am provide logo update have ethos share the we excited I to on our to a that coming First, and rebranding in to announce weeks. an we process.

name ethos very our As and our to one It important legacy to and note of important our name throughout transition an Appliances to customers continuity I journey, this priority transformation inspiration new we in Connection under a our name recognition from the of noted in Appliances be build platform entire and business. appliance installation. on with is year reflect call than top carry marketing our purchasing last a brand. branding much journey, particular. that keenly our of a just during aware over the will we This we've vision home was to selected single be Goedeker become March empowers in year brand. for a rebrand last The bringing This and more that marks but and unified and a retailer, milestone as months working remains rebrand, diligently brand and ensure smooth their are equity to why our next is team several Connection rollout

been new as new respect QX, end had we projects we offering, in exciting we with the are pipeline the $XX that such seeing for XXX some project of the previously solution million recently approximately remodel Second, QX, a our stated, at unit to projects have for we and pipeline awarded. as residential $X.X have BXB already in of building million

pace and to we the remainder with throughout early QX. we of year have the build we on progress similar made in the with pipeline are pleased the a working are have seen We

that in projects pipeline term revenue longer to growth are XX these materialize BXB expect fruition. will we X may this significant to noted, to XXXX. This into take previously come said, months As

to when to that warehouses more to network, at identifying consider Tight can factor we continue remain supply be that time location bring we the chain we and in with as bringing targeted ensure online including new optimistic our proper Third, a pricing normalized. about the supply new M&A. We focused and the is right warehouses on becomes fulfillment we affordable be inventory right the at online throughout any opportunity stocked must cost. want right expand

business. Before overwhelming America. would credit of agreements over handing feedback our to capital million we share excitement expanding our as BXB strategic non-dilutive affordable through and capital appreciate We enhancing the business recently a testament $XXX have out our model to from for the Maria, including shareholders what technology our key I our call you we means are of trajectory. this support the and the positive view partnership, to We announced to Bank glad We credit with fulfillment strategic strength agreement like long-term initiatives, for its strategic stack. and and address received our corporate that building secured this capabilities this our

over the an continue are capital conclude provide by my performance. structure Johnson future. remarks financial we I executing of to and optimizing Additionally, overview including repurchase Maria announced and to programs previously on our to turn any positioned authorized initial will program, share it our well in now

Maria Johnson

EBITDA the $X of QX increased margin income saw investment morning, of reflecting million in costs costs per for first XXXX. of the costs, costs expenses and in pro our approximately last million, our talent, forma Gross points card the margin reflecting normalized Net from XX.X% freight being million increased higher $XX.X and $XXX.X expenses or million XX.X% $X.X largest shipping the XX% some XXXX, Adjusted a Good $XXX.X QX XXXX. $XXX.X per impacted of a to and pro compared of quarter basis. million. costs for diluted up Net quarter than quarter diluted were with last for quarter. versus continued million XX% higher million causing more quarter. to quarter credit the basis $XX.X or to million with product compression for sales X% $X.X forma $X.X Thanks, was points million item million, which invoices part profit $X.X throughout energy compared was sales a fees of XX last on from And for approximately the quarter basis was margin due to the the the XXXX quarter has EBITDA XX $X.XX common historical margin for general advertising million sales with while Albert. and common X% Operating personnel last a expense and for gross we $X.XX were million loss by X.X compared quarter, for quarter share, everybody. Net $X.X million. expense administrative $XX.X top almost was versus level share and was million severance of with unpaid reduction first bank income the $XX.X quarter

of evident chain in quarter quarter which and incurred the million had working of as million investment during of challenges. operations the $X.X reflected flow facing we As company this negative from capital supply first $X.X cash continue additional of inventory $XX.X million

forma outlook, the earnings at Additionally, the year to call. articulated growth quarter. of XXXX gross XXXX We quarter year we which million reaffirming $XX.X to pro to the guidance year margins prior forecast for fourth compared were of provided forma company end results, low cash full full and teens adjusted to and previously had roughly and high are the With the our quarter, on flat our and respectively. XX our our equivalents EBITDA sales pro cash sales X% XX.X% to flat margins respect relatively

uncertainty and outlook uncertainties, the hope over by supply year the course refine this headwinds our sustained to While disruptions, we continue significant to face inflation if macroeconomic we caused ease. geopolitical chain of

for I Now, presentation to Albert back Albert? hand comments. the closing will

Albert Fouerti

Thank you, Maria.

sales our basis As a you steadily sequentially. build on and to year-over-year could continued have see,

Our margin challenges impacted supply chain factors. be other continued and to transitory by

the However, on benefits network shipping as and we the fulfillment which margins. chain expect stabilize progress will eases lower help from make costs, supply long-term we expansion our

the mitigate that call to CEO, to view are global building what as we we ability you I foundation related our in uncertainties to orders a our supply told over the strengthen to I first Additionally, phase. chain, build help to in quarters fill we which to continue as expect my inventory come.

will continued to have We long-term growth key believe our priorities, drive meaningful for business. make we which progress in our

in out As expand our remarks, network. working quarter, our talented with I the building and my questions. goal our there this solution BXB I any our opportunities the the I of and the fulfillment capture drive with highlighted I'll to opening in the am of look years. open proud identifying billion our in strides few forward $X to call ask sales offering in the team share partnerships, towards and incredibly refreshed operator to new the for team process, additional up as management particularly we rest to rebrand with made next of at time, conclude strive past market has

Operator

[Operator go Instructions] Please ahead. from Street Markets. Our comes question Ryan first Capital Meyers Lake from

Ryan Meyers

morning, Thanks my good guys. questions. Yes, for taking

of now you is growth initiatives the have you agreements capital, the some do guys million as The first what have that top one from growth as go? me, $XXX credit at shored so and the list far up

Albert Fouerti

morning, you? good are Hey, Ryan. How

Ryan Meyers

How you. thank well, you? Very are

Albert Fouerti

the we to we Good, of, have could went debt, lot going we're imagine the that, we pipeline look as that. restructured top structure, and well lot you is mind mix at from good. of our obviously, and so have a so we of a Yes, new capital

in move from to to out build we Second, have our warehouse we one that it locations around another warehouse. certain inventory

improving are We going we to fulfillment out that country. be have our around centers the

goal focus business our at looking business solutions. our to well. on And are obviously as We the grow ultimate offering and the BXB building out and is

Ryan Meyers

have to helpful, that that's Great, done. nice

sort there So we what quarter fulfill just have we the through progressed XXXX? improvement know, during order have speak could were I you seen if to of rates and any the you if wondered as

Albert Fouerti

XX% would almost to it's type QX anywhere had forward to say next to in the from same it still some rate. chain. We're relief I XXXX. steady struggling past, fill with the we're supply what Hopefully, the looking XX.X%, the I was We're struggles looking of past. Unfortunately, get or about QX mean, QX holding in we of in that the of

Ryan Meyers

were inventory your that now, think stand a with guys, right distribution good to spot when be do levels and centers? get to inventory then the where Okay, of you look able aggressive more at on these overall you a want think you'll Do in how and kind do bit fill little do you sufficiently is you you inventory?

Albert Fouerti

That's has costs really doesn't opening there not bring correct do out inventory to product in we is when with to the going in struggle the fulfillment want and the we're been at centers. What the we out back and be locations. buy Obviously able to right -- correct centers location, We're the help. really cost other up to the correct in these we right bringing in New right trying them distributing that out Jersey the our to and bringing in, what or extra stand right inventory. fulfillment the in making up, sure to have inventory

We’re and customer much obviously faster and just New cancellation the inventory country, amount which having in the better less and throughout out to could conversion, reduces it the of everything which going trying hopefully results damages than better to our so rather we in distribute shipping Jersey costs. costs, touches, distribute service

Ryan Meyers

of from year And sort little talk sort guidance guidance on bit into of alluded this macro last the full the what one you and are me, call. kind that's a kind helpful. guys that? kind of you're we to that then that of giving and see about But environment if you current the or baking in can the you just now of sort just environment supply continuation improvement, a or we potentially of we're right shipping upside see sort right to of whether logistics, and or can inflation it's now, some some and of chain Great,

Albert Fouerti

Yes.

lot in So what it the three in in that's past teens flat in we XXXX to and Ukraine, been showed from what why to baked XXs our similarly going low I were of forecasting say we we’ve high seen months, in baked put and a things the of to what war has and we past, QX in fuel there's would surcharges, inflation, QX so on XXXX, happened in we guidance growth. and we've the in

into seeing and and So we're what we've seen we've the baked baking in past the we're that environment. and right current now in what

Maria Johnson

there to I the might and to just we And in is is go possibility, obviously, hi that, is improve and a the the to uncertainty add Maria, point, make this to much think too economic our But reevaluate this guidance. conditions just back any future. guidance that at there if changes

Ryan Meyers

Thanks, helpful. that’s Great, guys.

Albert Fouerti

Thank you.

Operator

Greystone ahead. The Please Management. from go from next comes question Wilk Capital Adam

Adam Wilk

to Thanks good. a sales down and morning. for between were us so volume results, questions asked wondering was questions. results see sort pricing if of quarter I'm Really of and strong help quarter? previously, can Hey, you wondering happy mix the this taking my great my lot I'm job. good that's the break on the

Albert Fouerti

Sure, mix it, sorry, I'm between sales, last pricing? missed mix so between piece and just sales of I the the

Adam Wilk

see ask pricing in versus your me I'm quarter how things, interested happened the regarding out shaking another way. let kind you for things and Yes, volume hearing and in see commentary how you of what year? the

Albert Fouerti

the quarter already increases and at the of you're priced a and of Yes, pricing, referring if year I say QX. of they of, early so end were we the price lot beginning QX, early of just seen, to announced the just QX, that have would

haven't were already just price month, increase starting in in past. and been any April a I would seen announced in have increases new than they the roll say been we X So in, Q XXXX. that price of it's announced There a less new have to

price increases. haven't seen any we So new

to increases similar to announced it's soon. similar may what -- the QX. up what in manufacturers the of is in some coming June Some pricing had relatively we be But relatively

taking will the happening not in apply. how we, changes or the just effect in type a standpoint. see next uncertainty of the a any manufacturer surcharges yet quarter been marketplace that's in have wait after. So to the and pricing have again, this They fuel will apply We from major

Adam Wilk

for on there the side, that a a commentary chain Okay, great, minutes this that update few your thanks. in be somewhat And supply your but to year commentary ago, of maybe that's little full about indicates helpful, may things I targets. rest increase hearing your then the maybe room bit I'm year. you about guidance expectations or answered interested the know

of more bit business Some there color ease usual, half Thanks. people kind maybe are it any till of would causing the normalize might little XXXX or or to you Are for not same be XXXX. back sort the a seeing things of is as abate helpful? in headwinds

Albert Fouerti

lot orders, some in having relief. until So we seen navigating type manufacturers the still same treating same There the are we we've are way XXXX, XXXX. that or any it the have been of maybe had in We're past, we issues XXXX major XXXX, seeing them a of mid-XXXX. not back of

a having So lot in we're challenges supply chain. the of still

some Some product other of the categories. of categories may than see type relief earlier or faster

not focused best primarily product, are core the We on and appliances. particular better just

think I major QX Hopefully, QX. next any -- we're could So we going to something don't see quarter. we're or in in change the type see of

Adam Wilk

capital on And answered little side. new allocation And helpful. you well. come Okay, to want the and press release the great, this really a see kind that’s to I the lender as that's questions given happy great. just then through, on press was financing bit the especially I of terms, some

across If businesses, valuation demand. to hardline and your despite between environment, lessening of whether the guys higher you peers, input inflation, durables, take ability is execution current issues, to others, distributors, supply landscape a strong and really e-commerce pointing costs, chain you weather are the basically enormous people look that's consumer gap your sort this many of

You've this mean, targets, slowing also be I margin and guidance, really, don't point. to seem down confirmed at full year

only horizon, that's of all the company despite cetera. weakness, growing not if sequentially actually and consumer the sales year-over-year, of one be might on talk you et so, And selling recession appliances this

this the you'll and you're of that be the continue distressed trading true. it's a understand sort I keeps that But know implies thesis if to you sure terms making here. valuation know, a guys is the up of you're and basically in which early execute, merged at still business, telling I story So, business. investors clearly not

your comments I the helpful. How feel to guess surrounding given financing, in cetera buyback about and et sort maybe anything interested kind and interested I'd valuation be what you in would you. close just your taking gap. Thank program steps So, hearing you're that, of help be of new that

Albert Fouerti

Sure.

to make or if is just the as focus they aware no announcement as bit in the gave other last end really the million went took It's as do. but business. loan. strong, about is to you're they we business what company, growth. a at are that testament our focused to distressed. your what period. But We're from refer I'm a it's that we're an now, willing to until in and And blackout the sure back belief we you will go appliance just to until and I way speculate sure we're and on in of period. us only open healthy, our day any we strength first can't not do have But the When BOA, the business So perform. could I’ll what program. made company. from want I do point as our a totally not see that know, we're we We overall it's and what tomorrow to out understand what office going to stuff not, is pipeline we are trying we of you buyback the undervalued and and there have way Probably, do an point doing and a little a on $XXX on we've we're since we

business We're to That's market. focus the to community probably, better now. We're our with be else finish on able than the we really focused business. anybody want installation a to the appliance we're We online. mean, in I out a building We're inspired that’s going we're right there be that foundation an and and that's it sole -- to are structure own to community. a creating the out going consumers for

company. focused are on We the

company the of the the growth focused the We’re health and company. on of

Adam Wilk

Great. job appreciate Well, appreciate questions. that, my for I and can it. thank you great I taking

Albert Fouerti

Absolutely.

Operator

[Operator private go Grunfeld, ahead. Instructions] comes Our Please investor. Joe next from question a

Unidentified Analyst

guys. was my great the do you But gentleman's I company, guess be credit your Bank one I you anything thing to that the point frank, fully that creating gave people disparity of other the facility of like and entire that value earlier, is, To in think quarter, answered. of the that would from company literally at mentioned? market Yes, you Are ask in questions a were Greystone was America there again seeing your are name calls looking shops starting was it's with buzz? just incoming from you any interest somewhat a or of are going because now take an boutique

Albert Fouerti

coverage what the we communicating told up about. you, Yes the on The with us been lot almost to lot there, not and market are story the what weigh To your were absolutely, $XXX cap, of we million past, And are hasn't is are America out coverage. we a all and us Joe. the a Thank same story they're sure your money other told seeing a more. past, shops, analysts boutique I'm if it more has credit we It’s picking more hasn't management Bank the point had all of of amount value. in in facility. definitely they is lot yes, been of gave obviously, more seeing our seeing that we point

the to to are and coverage everything to on out story there. for reach the we and to the put We doing our story reach a proper and more out out end hoping tell that we're coverage analyst can

Unidentified Analyst

you much. Thank

Albert Fouerti

Thank you.

Operator

attending no more you our conference for now concludes the Thank concluded. in and question-and-answer questions are queue. has the session presentation. today's There This

disconnect. now may You