ECD Auto Design Announces Full Year 2023 Financial Results

Rhea-AI Summary

ECD Auto Design (ECDA) announced its 2023 financial results, showcasing a 22.5% revenue increase to $15.1 million and a 150% rise in gross profit to $4.2 million. The company also achieved an adjusted EBITDA of $1.1 million and reiterated its 2024 revenue expectation of $33 million, a 118% jump over 2023. The recent acquisition of Brand New Muscle Car assets further expands ECD's product line. Despite a net loss of $(1.6) million, ECD remains optimistic about its profitable growth strategies, focusing on production efficiency, market consolidation, and branding in the luxury classic car sector.

Positive

• Revenue increased by 22.5% to $15.1 million in 2023.

• Gross profit surged by 150% to $4.2 million in 2023.

• Adjusted EBITDA reached $1.1 million in 2023.

• Reiterated 2024 revenue expectation of $33 million, a 118% increase over 2023.

• Acquisition of Brand New Muscle Car assets for product line expansion.

• Positive outlook on profitable growth strategies for business expansion.

Negative

• Net loss of $(1.6) million in 2023.

• Operating expenses increased to $5.8 million in 2023.

• Net loss per diluted share increased to $(0.09) in 2023.

• Long-term liabilities of $10.7 million in convertible notes at year-end.

Financial Analyst

ECD Auto Design's financial results for the year ended 2023 indicate a remarkable improvement in revenue growth, clocking in at $15.1 million, a 22.5% year-over-year increase. This uptick is attributed to a rise in the average selling price per vehicle alongside production efficiencies. The gross profit surge to $4.2 million, marking a significant 150% increase, reflects positively on cost management and operational efficiency. However, the company still reports a net loss of $(1.6) million, albeit an improvement from the $(1.9) million operating loss in 2022. The leap in adjusted EBITDA to $1.1 million from a loss of $(1.3) million underscores a potential turnaround in core profitability metrics. The financial commitment to growth, seen in the acquisition of Brand New Muscle Car assets, suggests ECD is ambitiously exploring new market segments within the classic car industry. Despite the net loss, the company's liquidity position has strengthened with cash and equivalents rising to $8.1 million, providing a solid foundation for the projected revenue expectations of $33 million for 2024. The long-term convertible notes, valued at $10.7 million, will require attention as they represent both a financing tool and a potential risk factor for future interest expenses.

Automotive Industry Analyst

ECD's strategic acquisition indicates a diversification into the American muscle car segment, potentially expanding its market reach within the luxury classic car space. The company's emphasis on consolidation strategies and the establishment of an overarching luxury auto brand could catalyze its positioning and market share in an estimated $15 billion addressable market. The planned third production line focusing on classic Ford Mustangs could further solidify ECD as a leader in resto-mod industry, capitalizing on a niche market with high customer loyalty and willingness to pay premium prices for bespoke products. The scaling of production capabilities and the pursuit of both organic and inorganic growth opportunities underscore a proactive approach to capitalizing on market trends, particularly the increasing demand for personalized and luxury classic cars.

Market Research Analyst

The luxury classic car market is experiencing robust demand, with an appreciation for restoration and customization driving consumer spending. ECD's report highlights efficient production and an increase in their average selling price, signaling strong brand value and product desirability. By linking anticipated revenue growth to production efficiency and market consolidation, ECD is tapping into consumer trends favoring unique and high-quality automotive experiences. Moreover, the company's confidence in reiterating its $33 million revenue expectation for 2024 reflects a strategic vision aligned with these market trends. ECD's current financials and strategic decisions should be considered by investors in the context of their long-term potential to command a significant share of the luxury classic car market.

2023 Revenue increased 22.5% compared to 2022

Company Reiterates 2024 Revenue Expectation of $33 Million, a 118% Increase Over 2023

KISSIMMEE, Fla., May 3, 2024 /PRNewswire/ -- 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, and Ford Mustangs, announced today its financial results for the year ended December 31, 2023.

Business Highlights

• Revenue of $15.1 million for the full year 2023, an increase of 22.5% over the prior year period.
• Gross profit of $4.2 million for the full year 2023, an increase of 150% over the prior year period.
• Net income of $(1.6) million for the full year 2023, compared to $(1.4) million in 2022.
• Adjusted EBITDA of $1.1 million for the full year 2023, compared to $(1.3) million in 2022.
• Recently completed acquisition of certain assets of Brand New Muscle Car, providing an opportunity to introduce classic American muscle cars to its product line up
• Reiterates 2024 revenue guidance of at least $33 million for the full year, a 118% increase compared to 2022

Management Commentary

Scott Wallace, CEO & Founder, commented on the year's results, "2023 was a key period in ECD's history with the Company beginning trading on the Nasdaq exchange in December. Over the course of our Company's history, we have built over 500 custom cars and generated over $84 million in lifetime revenues. Our 100,000 square foot manufacturing facility currently has 2 production lines running and we are working to finalize our third production line to focus on classic Ford Mustangs following our recent acquisition of assets from Brand New Muscle Car. We can scale our existing footprint to maximize the business model while also looking at growth opportunities in the larger classic car ecosystem. We have continuously operated the Company to produce positive cash flow and will continue a disciplined approach to capital allocation whether those growth opportunities are organic or inorganic.

"ECD has three powerful paths toward profitable growth: maximizing production efficiency, consolidating the luxury classic car market, and building an umbrella luxury auto brand. We estimate this larger ecosystem represents an addressable market of $15 billion covering manufacturing, storage, brokerage and financial services. We believe that by filling the factory, building out our product base, and leveraging our respected brand, ECD will be able to build on our current leadership in the resto-mod industry to become the trusted luxury auto partner for discerning customers."

Financial Results

During the year ended December 31, 2023, overall revenue totaled $15.1 million, or an increase of 22.5%, compared to $12.3 million in the previous year. The increase was primarily due to an increase in average selling price per vehicle by $25,075 and increased production due to efficiency improvements.

Gross profit increase to $4.3 million or 28% of revenue compared to $1.7 million, or 14% or revenue in 2022.

Operating expenses increased to $5.8 million in 2023 compared to $3.6 million in 2022. The increase in operating expenses was primarily due to the increase in general and administrative expenses related to the Company's growth and expansion of operations as well as costs related to being a public company.

Operating income improved to $(1.6) million in 2023 from $(1.9) million in 2022. The increase was primarily due to improved gross margins due to a decrease in per truck material costs, and efficiencies in the build process.

Net loss for 2023 was ($1.6) million compared to a net loss of ($1.4) million in 2022. Earnings per diluted share were $(0.09) in 2023 compared to $(0,06) in 2022. The change in net income was primarily the result of interest expense affiliated with a letter of credit and convertible note.

Adjusted EBITDA, shown in tables below, increased to $1.1 million in 2023 from a loss of $(1.3) million in 2022. 

Cash and equivalents on December 31, 2023 were $8.1 million, compared to $3.5 million on December 31, 2022. Additionally, the company had $10.7 million convertible notes in long-term liabilities at year end.

About ECD Auto Design

ECD, a public company trading under ECDA on the Nasdaq, 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. 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 90 talented craftsmen and technicians, who hold a combined 61 ASE and five 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.

 

ECD AUTOMOTIVE DESIGN, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
		Year Ended December 31
		2023				2022
						As Restated
Revenue, net		$	15,123,596			$	12,343,745
Cost of goods sold (exclusive of depreciation and amortization expense shown below)			10,874,358				10,648,868
Gross profit			4,249,238				1,694,877
Operating expenses
Sales and marketing expenses			487,586				299,388
General and administrative expenses			5,240,230				3,285,140
Depreciation and amortization expenses			156,962				72,303
Total operating expenses			5,884,778				3,656,831
Loss from operations			(1,635,006)				(1,961,954)
Other (expense) income
Interest expense			(653,429)				(19,000)
Loss on sale of asset			-				(56,454)
Resale commissions income			86,370				539,659
Other income, net			85,142				38,699
Total other (expense) income, net			(481,917)				502,904
Loss before income tax benefit			(2,117,457)				(1,459,050)
Income tax benefit			515,444				-
Net Loss		$	(1,602,013)			$	(1,459,050)
Net loss per common share, basic and diluted		$	(0.09)			$	(0.06)
Weighted average number of common shares outstanding, basic and diluted			24,875,667				24,000,000

 

ECD AUTOMOTIVE DESIGN, INC
CONSOLIDATED BALANCE SHEETS
		December 31,
		2023				2022
						As Restated
ASSETS
Current assets
Cash and cash equivalents		$	8,134,211			$	3,514,882
Inventories			11,799,304				6,065,612
Other receivable			-				209,810
Prepaid and other current assets			34,006				68,419
Total current assets			19,967,521				9,858,723
Property and equipment, net			968,677				570,824
Right-to-use asset			3,763,294				3,896,608
Deferred tax asset			515,444				-
Deposit			77,686				75,986
TOTAL ASSETS		$	25,292,622			$	14,402,141
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable		$	768,812			$	486,816
Accrued expenses			687,000				193,424
Deferred Revenue			17,596,512				14,166,030
Lease liability, current			314,903				203,123
Other payable			1,533,815				362,234
Total current liabilities			20,901,038				15,411,627
Loan payable			-				500,000
Lease liability, non-current			3,727,182				3,889,658
Convertible note			10,683,452				-
Total Liabilities			35,311,672				19,801,285
Redeemable preferred stock, $0.0001 par value, 20,000,000 authorized shares; 25,000 shares issued and outstanding as of December 31, 2023 and no shares issued and outstanding as of December 31, 2022			3				-
Stockholders' deficit
Common stock, $0.0001 par value, 1,000,000,000 authorized shares; 31,874,662 shares and 24,000,000 shares issued and outstanding as of December 31, 2023 and 2022, respectively			3,187				2,400
Additional paid-in capital			-				2,474
Accumulated deficit			(10,022,240)				(5,404,018)
Total Stockholders' Deficit			(10,019,053)				(5,399,144)
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT		$	25,292,622			$	14,402,141

 

Adjusted EBITDA - Reconciliation of Net Income (loss) to
		For the year ended December 31,
		2023				2022
Net loss	$	(1,601,479)			$	(1,459,584)
Excluding:
Interest expense, net		653,429				19,000
Income tax (benefit) expense		515,444
Other income, net		85,142				38,699
Depreciation and amortization		156,962				72,303
Transaction costs		1,285,000
Adjusted EBITDA		1,094,498				(1,329,582)

 

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SOURCE ECD Automotive Design

FAQ

What was the revenue increase in 2023 for ECD Auto Design (ECDA)?

ECD Auto Design's revenue increased by 22.5% to $15.1 million in 2023.

What was the gross profit for ECD Auto Design (ECDA) in 2023?

ECD Auto Design's gross profit surged by 150% to $4.2 million in 2023.

What is ECD Auto Design's (ECDA) 2024 revenue expectation?

ECD Auto Design reiterated its 2024 revenue expectation of $33 million, a 118% increase over 2023.

What recent acquisition did ECD Auto Design (ECDA) complete?

ECD Auto Design recently completed the acquisition of certain assets of Brand New Muscle Car, expanding its product line.

What was the net loss for ECD Auto Design (ECDA) in 2023?

ECD Auto Design reported a net loss of $(1.6) million in 2023.