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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Newegg Commerce Inc | NASDAQ:NEGG | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.0046 | -0.54% | 0.8479 | 0.8479 | 0.875 | 0.884 | 0.84 | 0.8726 | 246,895 | 21:56:49 |
Newegg Commerce, Inc. (NASDAQ: NEGG), a leading global technology e-commerce retailer, today announced results for the fiscal year ended December 31, 2023 and guidance for the fiscal year ending December 31, 2024.
Newegg Chief Executive Officer Anthony Chow announced, “Despite the challenging environment, we remain optimistic for an exciting new product launch cycle in the second part of the year, including next generation GPUs and CPUs from AMD, Intel and NVIDIA. The range of new product launches are catered towards the increasing consumer demand for AI-driven computing performance, and Newegg believes we are well-positioned to help meet that demand. In addition, we expect several key initiatives to continue to gain traction in the second half of the year, including a focused expansion into adjacent marketplace verticals, a new AI PC product line for ABS, and the launch of Newegg Refreshed, our line of professionally refurbished products offered at an affordable price and backed by our 90-day Refreshed Guarantee. We are also excited about the launch of our recently announced loyalty program, Newegg+, which offers customers an opportunity to enjoy free shipping, exclusive member-only discounts, early access to the latest product launches, and other valuable benefits. Finally, we look forward to welcoming our valued employees to our new headquarters in Diamond Bar, California in the second half of the year, where we look to continue to foster growth and connection across our organization.”
Newegg Chief Accounting Officer Christina Ching noted, “In 2023, we improved our efficiency to cope with conservative consumer spending due to the macroeconomic environment. In response to this challenge, Newegg implemented multiple cost optimization initiatives, including our real estate consolidation efforts, and expects full realization of the cost saving benefits in 2024. We also increased our average inventory turnover rate and reduced total inventory from $156.0 million as of December 31, 2022, to $136.2 million as of December 31, 2023. Our cash position decreased from $122.6 million as of December 31, 2022 to $102.5 million as of December 31, 2023 after factoring in the $23.2 million cash purchase of our new corporate headquarters building in Diamond Bar, California. Furthermore, as of December 31, 2023, we had no outstanding balance under our $100 million credit facility. Finally, we have repurchased $2.0 million of our common stock during the first quarter of 2024 under our $10.0 million share repurchase program and expect to continue to opportunistically repurchase shares throughout the remainder of the year.”
2023 Fiscal Year Financial Highlights
2023 Fiscal Year Operational Metrics
2024 Fiscal Year Guidance
The Company currently expects to achieve the following financial performance for the upcoming year ending December 31, 2024:
The Company anticipates filing its annual report on Form 20-F for the fiscal year ended December 31, 2023, on April 24, 2024.
About Newegg
Newegg Commerce, Inc. (NASDAQ: NEGG), founded in 2001 and based in the City of Industry, Calif., near Los Angeles, is a leading global online retailer for PC hardware, consumer electronics, gaming peripherals, home appliances, automotive and lifestyle technology. Newegg also serves businesses’ e-commerce needs with marketing, supply chain, and technical solutions in a single platform. For more information, please visit Newegg.com.
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Non-GAAP Financial Information
This press release presents certain “non-GAAP” financial measures. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of non-GAAP financial measures used in this press release to their nearest comparable GAAP financial measures is included in the schedules attached hereto.
GMV
The Company defines gross merchandise value, or GMV, as the total dollar value of products sold on its websites and third-party marketplace platforms, directly to customers and by its Marketplace sellers through Newegg Marketplace, net of returns, discounts, taxes, and cancellations. GMV also includes the services fees charged through its Newegg Partner Services (“NPS”) in rendering services for its third-party logistics (“3PL”), shipped-by-Newegg (“SBN”), staffing and media ad services, as well as the sales made by its Asia subsidiaries.
Adjusted EBITDA
Newegg calculates Adjusted EBITDA as net income/loss, excluding stock-based compensation expense, depreciation and amortization expense, interest income, net, income tax (benefit) provision, gain/loss from warrants liabilities, and gain/loss from sales of investment.
Newegg believes that exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and excludes items that it does not consider to be indicative of its core operating performance. Accordingly, Newegg believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of Newegg’s results as reported under GAAP. Some of these limitations are: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; Adjusted EBITDA does not reflect changes in, or cash requirements for, the working capital needs; Adjusted EBITDA does not consider the potentially dilutive impact of stock-based compensation; Adjusted EBITDA does not reflect tax payments that may represent reduction in cash available to Newegg; and other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, operating profit and Newegg’s other GAAP results.
Cautionary Statement Concerning Forward-Looking Statements
This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations, opinion, belief or forecasts of future events and performance. Words such as “will,” “may,” “expects,” “projects,” “anticipates,” “plans,” “believes,” “estimate,” “should,” and variations of such words or similar expressions are intended to identify such forward-looking statements. In addition, any statements other than statements of historical fact are forward-looking statements. Although Newegg believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this news release. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The Company takes no obligation to update or correct its own forward-looking statements, except as required by law, or those prepared by third parties that are not paid for by the Company. The Company’s SEC filings are available at http://www.sec.gov.
NEWEGG COMMERCE, INC.
Consolidated Balance Sheets
December 31, 2023 and 2022
(In thousands, except par value, unaudited)
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
102,512
$
122,559
Restricted cash
3,962
947
Accounts receivable, net
80,383
83,517
Inventories, net
136,164
156,016
Income taxes receivable
3,226
5,173
Prepaid expenses
13,424
16,999
Other current assets
4,780
5,611
Total current assets
344,451
390,822
Property and equipment, net
61,479
45,075
Noncurrent deferred tax assets
1,607
868
Investment at cost
2,250
11,250
Right of use assets, net
77,150
84,161
Other noncurrent assets
12,110
9,919
Total assets
$
499,047
$
542,095
Liabilities and Equity
Current liabilities:
Accounts payable
$
206,588
$
207,147
Accrued liabilities
43,014
51,003
Deferred revenue
25,614
31,028
Line of credit
7,330
6,056
Current portion of long-term debt
268
269
Lease liabilities – current
13,730
14,265
Total current liabilities
296,544
309,768
Long-term debt, less current portion
1,110
1,404
Income taxes payable
1,981
739
Lease liabilities – noncurrent
68,126
74,838
Other liabilities
1,894
124
Total liabilities
369,655
386,873
Stockholders’ Equity
Common Stock, $0.021848 par value; unlimited shares authorized; 380,413 and 376,660 shares issued and outstanding as of December 31, 2023 and 2022, respectively
8,312
8,230
Additional paid-in capital
266,774
232,776
Notes receivable – related party
(15,189
)
(15,189
)
Accumulated other comprehensive income
194
1,114
Accumulated deficit
(130,699
)
(71,709
)
Total stockholders’ equity
129,392
155,222
Total liabilities and stockholders’ equity
$
499,047
$
542,095
NEWEGG COMMERCE, INC.
Consolidated Statements of Operations
Years ended December 31, 2023 and 2022
(In thousands, unaudited)
2023
2022
Net sales
$
1,496,963
$
1,720,273
Cost of sales
1,329,406
1,503,647
Gross profit
167,557
216,626
Selling, general, and administrative expenses
238,641
266,164
Loss from operations
(71,084
)
(49,538
)
Interest income
2,348
1,164
Interest expense
(2,541
)
(685
)
Other income, net
2,759
5,280
Impairment of equity method investment
—
(2,281
)
Gain from sales of investment
6,835
1,669
Change in fair value of warrants liabilities
11
1,063
Loss before provision for income taxes
(61,672
)
(43,328
)
Provision for (benefit from) income taxes
(2,682
)
14,101
Net loss
$
(58,990
)
$
(57,429
)
NEWEGG COMMERCE, INC.
Consolidated Statements of Cash Flows
Years ended December 31, 2023 and 2022
(In thousands, unaudited)
2023
2022
Cash flows from operating activities:
Net loss
$
(58,990
)
$
(57,429
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
13,437
11,021
Allowance for expected credit losses
245
697
Recovery of related party receivable
—
(50
)
Provision for obsolete and excess inventory
3,400
9,537
Stock-based compensation
33,660
33,939
Impairment of equity method investment
—
2,281
Gain from sales of investment
(6,835
)
(1,669
)
Change in fair value of warrant liabilities
(11
)
(1,063
)
Loss on disposal of property and equipment
180
431
Unrealized loss on marketable securities
4
55
Deferred income taxes
(679
)
12,499
Changes in operating assets and liabilities:
Accounts receivable
2,758
(21,969
)
Inventories
16,781
78,766
Prepaid expenses
3,583
905
Other current assets
7,086
9,982
Accounts payable
(898
)
(14,063
)
Accrued liabilities and other liabilities
(12,063
)
(34,449
)
Deferred revenue
(5,497
)
(8,941
)
Net cash provided by (used in) operating activities
(3,839
)
20,480
Cash flows from investing activities:
Payments to acquire property and equipment
(30,265
)
(9,190
)
Proceeds on disposal of property and equipment
176
1
Proceeds from sale of investment
15,835
5,419
Net cash used in investing activities
(14,254
)
(3,770
)
Cash flows from financing activities:
Borrowings under line of credit
66,502
46,188
Repayments under line of credit
(65,098
)
(45,742
)
Repayments of long-term debt
(264
)
(274
)
Proceeds from exercise of stock options
1,194
2,890
Payments for employee taxes related to stock compensation
(774
)
(1,514
)
Net cash provided by financing activities
1,560
1,548
Foreign currency effect on cash, cash equivalents and restricted cash
(499
)
918
Net increase (decrease) in cash, cash equivalents and restricted cash
(17,032
)
19,176
Cash, cash equivalents and restricted cash:
Beginning of period
123,506
104,330
End of period
$
106,474
$
123,506
Schedule 1
Reconciliation of Net Sales to GMV
For the Year Ended December 31,
2023
2022
(in millions)
Net Sales
$
1,497.0
$
1,720.3
Adjustments:
GMV - Marketplace
369.7
552.2
Marketplace Commission
(33.6
)
(49.6
)
Deferred Revenue
(5.4
)
(9.3
)
Other
(15.2
)
(17.5
)
GMV
$
1,812.5
$
2,196.1
Schedule 2
Reconciliation of Net Income to Adjusted EBITDA
For the Year Ended December 31,
2023
2022
(in millions)
Net loss
$
(59.0
)
$
(57.4
)
Adjustments:
Stock-based compensation expenses
33.7
33.9
Interest income, net
0.2
(0.5
)
Income tax (benefit) provision
(2.7
)
14.1
Depreciation and amortization
13.4
11.0
Impairment of equity method investment
—
2.3
Gain from sale of investment
(6.8
)
(1.7
)
Gain from change in fair value of warrants liabilities
(0.1
)
(1.1
)
Adjusted EBITDA
$
(21.3
)
$
0.6
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424604170/en/
Newegg Commerce, Inc.: Investor Relations ir@newegg.com
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