Vroom(US:VRM)2025-05-14 20:30Part I - Financial Information Financial Statements The company's Q1 2025 financials reflect its emergence from bankruptcy and adoption of fresh start accounting, making comparisons to prior periods difficult Condensed Consolidated Balance Sheets The balance sheet shows positive stockholders' equity of $158.6 million post-reorganization, driven by the elimination of $291.6 million in compromised liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Successor) | December 31, 2024 (Predecessor) | | :--- | :--- | :--- | | Total Assets | $989,956 | $1,066,696 | | Cash and cash equivalents | $14,565 | $29,343 | | Finance receivables at fair value | $858,200 | $503,848 | | Finance receivables held for sale, net | $0 | $318,192 | | Total Liabilities | $831,329 | $1,097,641 | | Warehouse credit facilities | $114,187 | $359,912 | | Long-term debt | $655,430 | $381,366 | | Liabilities subject to compromise | $0 | $291,577 | | Total Stockholders' Equity (Deficit) | $158,627 | $(30,945) | Condensed Consolidated Statements of Operations The company reported a significantly reduced net loss from continuing operations in the post-bankruptcy period, aided by a large one-time reorganization gain Statement of Operations Summary (in thousands) | Metric | Jan 15 - Mar 31, 2025 (Successor) | Jan 1 - Jan 14, 2025 (Predecessor) | Three Months Ended Mar 31, 2024 (Predecessor) | | :--- | :--- | :--- | :--- | | Net interest income | $25,991 | $4,988 | $36,737 | | Total noninterest income (loss) | $10,206 | $1,044 | $(1,860) | | Total expenses | $31,397 | $5,181 | $48,298 | | Reorganization items, net | $0 | $51,036 | $0 | | Net (loss) income from continuing operations | $(6,450) | $45,090 | $(44,676) | | Net income (loss) from discontinued operations | $99 | $(4) | $(22,941) | | Net (loss) income | $(6,351) | $45,086 | $(67,617) | Net (Loss) Income Per Share (Diluted) | Metric | Jan 15 - Mar 31, 2025 (Successor) | Jan 1 - Jan 14, 2025 (Predecessor) | Three Months Ended Mar 31, 2024 (Predecessor) | | :--- | :--- | :--- | :--- | | Continuing operations | $(1.25) | $23.89 | $(24.90) | | Discontinued operations | $0.02 | $(0.00) | $(12.79) | | Diluted EPS | $(1.23) | $23.89 | $(37.68) | Condensed Consolidated Statements of Cash Flows Operating cash flow turned positive to $17.3 million in the post-bankruptcy period, mainly due to changes in accounting for finance receivables Cash Flow Summary - Continuing Operations (in thousands) | Cash Flow Activity | Jan 15 - Mar 31, 2025 (Successor) | Jan 1 - Jan 14, 2025 (Predecessor) | Three Months Ended Mar 31, 2024 (Predecessor) | | :--- | :--- | :--- | :--- | | Net cash from Operating Activities | $17,289 | $(5,804) | $(75,043) | | Net cash from Investing Activities | $(48,334) | $2,981 | $35,324 | | Net cash from Financing Activities | $36,987 | $(13,898) | $18,670 | Notes to Condensed Consolidated Financial Statements Notes detail the wind-down of the e-commerce business, emergence from Chapter 11, adoption of fresh start accounting, and new debt facilities - The company's e-commerce and used vehicle dealership business wind-down was substantially completed on March 29, 2024, and is now reported as a discontinued operation3334 - Vroom emerged from its Prepackaged Chapter 11 Case on January 14, 2025, adopting fresh start accounting, which makes financial statements before and after this date not comparable3843 - As part of the reorganization, all outstanding obligations under the Convertible Senior Notes (approx $291.7 million) were fully satisfied and discharged in exchange for new common stock135155183 - In March 2025, UACC completed a securitization transaction (2025-1), selling approximately $307.8 million of asset-backed securities113 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the successful Chapter 11 emergence, its strategic focus on UACC and CarStory, and improved Q1 2025 non-GAAP results - The company emerged from its Prepackaged Chapter 11 Case on January 14, 2025, eliminating long-term debt at the Vroom, Inc level and re-listing on the Nasdaq Global Market on February 20, 2025284285 - The long-term strategic plan focuses on four initiatives: building a world-class lending program, enhancing sales and marketing, and achieving operational excellence307 - As of March 31, 2025, the company had $14.6 million in cash and cash equivalents, $53.0 million in restricted cash, and access to a new $25.0 million delayed draw term loan facility379382 Reconciliation of Net Loss to Adjusted Net Loss (in thousands) | | Three Months Ended Mar 31, 2025 (Combined Non-GAAP) | Three Months Ended Mar 31, 2024 (Predecessor) | | :--- | :--- | :--- | | Net (loss) income from continuing operations | $38,640 | $(44,676) | | Stock compensation expense | $635 | $1,324 | | Severance expense | $25 | $0 | | Bankruptcy costs (post-emergence) | $913 | $0 | | Reorganization items, net | $(51,036) | $0 | | Impairment charges | $4,156 | $2,752 | | Adjusted net loss | $(6,667) | $(40,600) | Quantitative and Qualitative Disclosure About Market Risk As a smaller reporting company, Vroom is not required to provide market risk disclosures - Vroom, Inc is classified as a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk419 Controls and Procedures Management concluded that disclosure controls were effective as of March 31, 2025, with new controls added for fresh start accounting - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level422 - In Q1 2025, the company established new controls over the application of fresh start accounting following its emergence from the Prepackaged Chapter 11 Case423 Part II - Other Information Legal Proceedings The company reports the dismissal of a securities class action lawsuit and related derivative suits, alongside its Chapter 11 emergence - On March 19, 2025, the court granted Vroom's motion to dismiss all claims in the In re: Vroom, Inc Securities Litigation class action lawsuit205429 - Related shareholder derivative lawsuits filed in New York and Delaware have been voluntarily dismissed by the plaintiffs and the cases have been closed206207430 - The company emerged from its Prepackaged Chapter 11 Case on January 14, 2025, after the court confirmed its plan of reorganization428 Risk Factors No material changes have been made to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K - There have been no material changes to the company's risk factors as described in its Annual Report on Form 10-K for the year ended December 31, 2024435 Other Information The company announced a leadership transition, with Agnieszka Zakowicz stepping down as CFO to be succeeded by Jon Sandison - Effective May 15, 2025, Agnieszka Zakowicz will cease her service as Chief Financial Officer439 - Jon Sandison, current CFO of UACC, will succeed Ms Zakowicz as the company's Chief Financial Officer, with a new annual base salary of $400,000440443 - Jacob Benzaquen will be promoted to Senior Vice President Accounting and principal accounting officer, with an annual base salary of $300,000441447 Exhibits This section lists all exhibits filed with the Form 10-Q, including agreements related to reorganization and executive compensation